The Degree of Financial Leverage is defined as the percentage magnification of earnings after tax and preferred dividends (EAT) or earnings per share (EPS) for any given percentage change in Net Sales. True or False

Operating leverage can have the effect of magnifying the percentage change in earnings before interest and tax given a percentage change in net sales. True or False

Retained earnings has a cost of capital that is higher than that of the cost of capital for new issues of common stock because it includes a required return for the lack of dividend payments. True or False