Ignoring Taxes,leverage Becomes a Disadvantage to a Firm as Soon

question 79

Multiple Choice

Ignoring taxes,leverage becomes a disadvantage to a firm as soon as the firm's earnings before interest

• A)become negative.
• B)exceed the breakeven point.
• C)exceed the interest expense.
• D)exceed the firm's unlevered earnings.
• E)fall below the breakeven point.

---

Definitions:

Main Effect

In statistical analysis, the direct impact of an independent variable on a dependent variable, disregarding the influences of or interactions with other variables.

Reject

In statistics, to refuse the null hypothesis based on evidence from sample data meeting a predetermined significance level.

Interaction Effect

In statistics, the effect that an independent variable has on the outcome variable depends on or varies according to the levels of one or more other independent variables.

F-Ratio

A statistical value used to compare variances in ANOVA tests, determining if there are significant differences between group means.