Financial leverage deals with
A. the relationship of fixed and variable costs.
B. the relationship of debt and equity in the capital structure.
C. the entire income statement.
D. the entire balance sheet.
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If EBIT equals $200,000 and interest equals $40,000, what is the degree of financial leverage?
A. 5.33
B. 1.25
C. 0.8125
D. 4.33
The degree of financial leverage is concerned with the relationship between
A. changes in volume and changes in EPS
B. changes in volume and changes in EBIT
C. changes in EBIT and changes in EPS
D. changes in EBIT and changes in operating income.
"Operating leverage" is the use of fixed costs to magnify returns at high levels of operation.
A. 对
B. 错
Financial leverage emphasizes the impact of using debt in the business.
A. 对
B. 错