Which of the following is not expressly incorporated into the Degree of Total Leverage (DTL) calculation?
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A. B. C. D. E. F.F
The Degree of Total Leverage (DTL) calculation measures the percentage change in EPS from a given percentage change in sales. The equation used to produce
DTL is as follows:
{DTL = [(Sales - Variable Costs) / (Sales - Variable Costs - Fixed Costs - Interest Expense)]. Of all the choices listed, "only the number of common shares outstanding" is not expressly incorporated into the DTL calculation.