[amp_mcq option1=”sensitivity of EBIT with respect of % change with respect to output” option2=”% variation in the level of production” option3=”sensitivity of EPS with respect to % change in level of EBIT” option4=”no change with EBIT and EPS” correct=”option3″]<\/p>\n
The correct answer is: C. sensitivity of EPS with respect to % change in level of EBIT.<\/p>\n
Financial leverage is a measure of how much debt a company uses to finance its assets. A high degree of financial leverage means that a company has a lot of debt, and a low degree of financial leverage means that a company has very little debt.<\/p>\n
The sensitivity of EPS with respect to % change in level of EBIT is a measure of how much a company’s earnings per share (EPS) will change for every 1% change in its earnings before interest and taxes (EBIT). A high degree of financial leverage means that a company’s EPS will be more sensitive to changes in EBIT, and a low degree of financial leverage means that a company’s EPS will be less sensitive to changes in EBIT.<\/p>\n
Here is a brief explanation of each option:<\/p>\n
[amp_mcq option1=”sensitivity of EBIT with respect of % change with respect to output” option2=”% variation in the level of production” option3=”sensitivity of EPS with respect to % change in level of EBIT” option4=”no change with EBIT and EPS” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-54574","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n