It's December 31. Last year, Torres Industries had sales of $160,000,000, and it forecasts that next year's sales will be $144,000,000. Its fixed costs have been and are expected to continue to be $64,000,000, and its variable cost ratio is 11.00%. Torres'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 is. The percentage change in earnings per share (EPS) is. The degree of financial leverage (DFL) at $144,000,000 is. The following are the two principal equations that can be used to calculate a firm's DFL value: DFL (at EBIT = $X) = Percentage Change in EPS/Percentage Change in EBIT DFL (at EBIT = $X) = EBIT/{EBIT - Interest - [Preferred Dividends/(1 - Tax Rate)]} Consider the following statement about DFL, and indicate whether or not it is correct. Assume that a firm's fixed capital costs remain constant across a range of operating profit (EBIT) values. The firm's DFL will vary across the range of EBIT values. True False