Other Things Held Constant,which of the Following Statements Is Correct

question 121

Multiple Choice

Other things held constant,which of the following statements is correct if a firm currently is operating at its financial breakeven point?

• A) EBIT must be greater than zero.
• B) EBIT would equal zero if the firm is financed only with common stock (i.e. ,there is no debt or preferred stock).
• C) EBIT would equal zero,hence EPS would be less than zero,if the firm has preferred stock but no debt.
• D) EPS would equal zero only if the firm is financed with some amount of debt.
• E) The firm would not be considered to have much financial risk,especially when compared to a firm that operates well above its financial breakeven point.

---

Definitions:

Environmental Sustainability

An approach to natural resource management that seeks to safeguard the environment and maintain ecological balance in the face of ongoing human activity and development.

Triple Bottom Line

A business framework that encourages companies to focus equally on social, environmental, and financial responsibilities.

Sustainability Targets

Goals set by an organization to achieve environmental, social, and economic improvements as part of its sustainability efforts.