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NEW QUESTION: 1
Degree of Total Leverage = DTL; Degree of Operating Leverage = DOL; Degree of Financial
Leverage = DFL.
Which of the following is incorrect?
A. DOL = % change in EBIT / % change in Sales
B. DTL =DOL * DFL
C. DFL = % change in EPS / % change in NI
Answer: C
Explanation:
DOL = % change in EBIT / % change in Sales DCL (Degree of Combined Leverage) = % change in EPS / % change in Sales DFL = % change in EPS / % change in EBIT DTL = DOL * DFL
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