Degree of total leverage can be applied in measuring change in...

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Degree of total leverage can be applied in measuring change in _________.

A. EBIT to a percentage change in quantity

B. EPS to a percentage change in EBIT

C. EPS to a percentage change in quantity

D. Quantity to a percentage change in EBIT

Answer: Option C

Solution (By Examveda Team)

Degree of total leverage can be applied in measuring change in EPS to a percentage change in quantity. Degree of total leverage is the ratio of percentage change in earnings per share to percentage change in sales revenue.

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Comments (2)

Krishna Kumar:

4 years ago

Sorry. I thought it was DFL.
Krishna Kumar:

4 years ago

Option B is right.

DFL= % Change in EPS / % Change in EBIT

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