3. A review of the degree of financial leverage (DFL)It's December 31. Last year, Campbell Construction had sales of $80,000,000, and it forecasts that next year's sales will be $76,000,000. Its fixed costs have been and are expected to continue to be $40,000,000, and its variable cost ratio is 11.00%. Campbell's capital structure consists of a $15 million bank loan, on which it pays an interest rate of 8%, and 750,000 shares of common equity. The company's profits are taxed at a marginal rate of 40%. Given this data, complete the following sentences: The percentage change in EBIT isThe percentage change in earnings per share (EPS) is The degree of financial leverage (DFL) at $76,000,000 is The following are the two principal equations that can be used to calculate a firm's DFL value: Consider the following statement about DFL, and indicate whether or not it is correct. The reason that the firm's preferred dividends are divided by (1 - Tax Rate) in the second equation is to adjust for the tax-deductibility of the dividends. This adjustment converts them from a pretax basis to an after-tax basis.True False