The Effect of Financial Leverage Depends on the Operating Earnings

question 24

Multiple Choice

The effect of financial leverage depends on the operating earnings of the company. Which of the following is not true?

• A) Below the indifference or break-even point in EBIT the non-levered structure is superior.
• B) Financial leverage increases the slope of the EPS line.
• C) Above the indifference or break-even point the increase in EPS for all equity structures is less than debt-equity structures.
• D) Above the indifference or break-even point the increase in EPS for all equity structures is greater than debt-equity structures.
• E) The rate of return on operating assets is unaffected by leveragE.

Recognize the advantages and disadvantages of ADR over traditional litigation.

Identify the circumstances under which arbitration is preferred and its enforceability within legal and contractual contexts.

Distinguish between different types of ADR (arbitration, mediation, negotiation) and their respective processes and outcomes.

Understand the role of the Equal Employment Opportunity Commission (EEOC) and its interaction with arbitration agreements in the context of employment discrimination.

---

Definitions:

Three-Way Conference

A meeting involving the student, teacher, and parent(s) to discuss the student's progress, strengths, and areas for improvement.

Guidance Counselor

A professional who provides students with academic, career, and personal/social advice and guidance.

Virtual Conferences

Online events that bring individuals together through digital platforms for discussion, presentations, and networking.

Litigation

Litigation is the process of taking legal action or resolving disputes through the court system.