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A firm has EBIT = 10000 and interest payments on debt of 1000... a. The degree of financial leverage is 1.11 b. The degree of

A firm has EBIT = 10000 and interest payments on debt of 1000...

a. The degree of financial leverage is 1.11

b. The degree of financial leverage is 1.00

c. The firm has more financial risk than an unlevered firm

d. Degree of financial leverage relates changes in EBIT to changes in earnings per share (EPS)

e. a, c, and d are all correct

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