Asked by
Palwinder Shergill
on Dec 01, 2024
Verified
If the DFL equals one, then ____.
A) ROCE equals ROE
B) additional debt does not affect EPS
C) there is no business risk
D) financial risk is maximized
DFL
Degree of Financial Leverage, a ratio that measures the sensitivity of a company's earnings per share (EPS) to fluctuations in its operating income due to changes in its capital structure.
Financial Risk
Facing potential financial losses in an investment or entrepreneurial endeavor.
- Examine and quantify financial measurements and leverages, such as EPS, DFL, and ROE.
- Ascertain the impact of financial leverage on a corporation's economic performance.
Verified Answer
BK
Learning Objectives
- Examine and quantify financial measurements and leverages, such as EPS, DFL, and ROE.
- Ascertain the impact of financial leverage on a corporation's economic performance.
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