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    Practical Financial Management Study Set 1
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    Exam 14: Capital Structure and Leverage
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    In a Leveraged Firm, the Variation in ROE and EPS
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In a Leveraged Firm, the Variation in ROE and EPS

Question 107

Question 107

True/False

In a leveraged firm, the variation in ROE and EPS will always be less than the variation in the firm's EBIT because of the lower cost of capital.

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