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Business, 20.04.2020 19:15 clairee002
The degree of leverage concept is designed to show how changes in sales affect earnings before interest and taxes (EBIT) and earnings per share (EPS). If a 10 percent increase in sales causes EPS to increase from $1.00 to $1.50 and if the firm uses no debt, then what is its degree of operating leverage?
a.
3.6
b.
5.5
c.
4.7
d.
4.2
e.
5.0
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Answers: 3
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