If a Firm Increases Its Financial Leverage,then What Would We

question 4

Multiple Choice

If a firm increases its financial leverage,then what would we generally expect for the effect of that increased leverage on EPS to be if the firm's EPS is already quite high?

• A) EPS would be lower with financial leverage
• B) EPS would always be the same with financial leverage
• C) EPS would be higher with financial leverage
• D) it is not possible to determine

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