Which One of the Following Statements Is Correct Concerning the Relationship

question 58

Multiple Choice

Which one of the following statements is correct concerning the relationship between a levered and an unlevered capital structure? Assume there are no taxes.

• A)At the break-even point, there is no advantage to debt.
• B)The earnings per share will equal zero when EBIT is zero for a levered firm.
• C)The advantages of leverage are inversely related to the level of EBIT.
• D)The use of leverage at any level of EBIT increases the EPS.
• E)EPS are more sensitive to changes in EBIT when a firm is unlevered.

Comprehend the importance of effect size magnitude and its interpretation.

Grasp the guidelines for using effect size in research.

Understand how to formulate both directional and nondirectional research hypotheses from research problems.

Understand the relationship between sample and population in hypothesis testing.