What is Meant by the Degree of Financial Leverage?

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What is Meant by the Degree of Financial Leverage?

What is Meant by the Degree of Financial Leverage?

The degree of financial leverage is defined as the percent change in earnings per share of a publicly traded company that results from a given change in earnings before interest and taxes, called EBIT. It is often referred to as DFL, and is another measure of the volatility of a given stock. An analogy can be made between Forex trading leverage, and this traditional company strength measure.

   

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