When Comparing Levered Vs

question 84

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 less income to be distributed over less shares.
• C) interest payments on the debt stay fixed, leaving more 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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Definitions:

Causative Organism

A pathogen or microorganism that causes disease or illness in its host.

Hypertension

High blood pressure, usually a chronic condition; often identified by a systolic blood pressure above 140 mm/Hg and/or a diastolic blood pressure above 90 mm/Hg.

CKD

Chronic Kidney Disease, a condition characterized by a gradual loss of kidney function over time.

Cause-and-Effect Relationship

A principle that states a cause is something that makes something else happen, and an effect is what happens as a result of the cause.