When Comparing Levered Vs

question 23

Multiple Choice

When comparing levered vs.unlevered capital structures,leverage works to increase EPS for high levels of EBIT because:

• A)interest payments on the debt vary with EBIT levels.
• B)interest payments on the debt stay fixed, leaving more income to be distributed over less shares.
• C)interest payments on the debt stay fixed, leaving less income to be distributed over less shares.
• D)interest payments on the debt stay fixed, leaving less income to be distributed over more shares.
• E)interest payments on the debt stay fixed, leaving more income to be distributed over more shares.

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A false statement of fact made with knowledge of its falsity, intended to induce another to act, resulting in harm.