Multiple Choice
Assume you are reviewing a graph that plots earnings per share (EPS) against earnings before interest and taxes (EBIT) . The steeper the slope of the plotted line the:
A) lower the impact of financial leverage.
B) lower the debt-equity ratio.
C) higher the tax rate.
D) greater the sensitivity of EPS to changes in EBIT.
E) lower the probability of a negative EPS.
Correct Answer:
Verified
Correct Answer:
Verified
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