Which of the following leverages considers the effect on earnings per share (EPS) of the changing operating income (EBIT)?
A) Operating leverage
B) Total leverage
C) Combined leverage
D) Contribution leverage
E) Financial leverage

Question

Quizplus · Accepted Answer

Financial leverage considers the effect on earnings per share (EPS) of the changing operating income (EBIT) by using debt to finance the company's operations, which affects the net income and subsequently the EPS.

Which of the Following Leverages Considers the Effect on Earnings