When Comparing Levered Versus Unlevered Capital Structures,leverage Works to Increase

question 65

Multiple Choice

When comparing levered versus unlevered capital structures,leverage works to increase EPS for high levels of EBIT because interest payments on the debt

• A)increase as EBIT increases.
• B)stay fixed,leaving more income to be distributed over fewer shares.
• C)stay fixed,leaving less income to be distributed over fewer shares.
• D)stay fixed,leaving less income to be distributed over more shares.
• E)decrease as EBIT increases.

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Definitions:

Win-lose Orientation

is a competitive mindset where a person or group views situations in terms of winning or losing, often at the expense of others.

Interpersonal Conflict

Interpersonal conflict is a disagreement or clash between two or more individuals due to differences in opinions, values, or interests.

Management Styles

The varied approaches leaders use to interact with employees, make decisions, and direct operations within an organization.

Goal Incompatibility

The situation where the objectives of different individuals or groups are at odds, leading to potential conflict.