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The use of preference share capital as against debt finance

This question belongs to Commerce Financial Management
Financial Management
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The use of preference share capital as against debt finance.

Answer & Solution
Correct Answer: Option A
The use of preference share capital as against debt finance reduces DFL. A degree of financial leverage (DFL) is a leverage ratio that measures the sensitivity of a company's earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure.
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