List some of the benefits and limitations of financial leverage when it comes to profitability.

As you explored in your textbook, financial leverage refers to the amount of debt used in the capital structure of a business. The degree of financial leverage measures the effect of a change in the earnings per share (EPS) of the company that occurs because of a percent change in the earnings before interest and taxes (EBIT).
List some of the benefits and limitations of financial leverage when it comes to profitability.
Then, explain the factors a company should consider when deciding which type of leverage plan (i.e., leveraged or conservative) it should follow.

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