In Considering EBIT-EPS Analysis, Which of the Following Statements Is/are

Multiple Choice

In considering EBIT-EPS analysis, which of the following statements is/are correct?

A) If the expected earnings are above the indifference point, the debt option is preferred.
B) If the expected earnings are below the indifference point, the equity option is preferred.
C) Both statements a and b are correct.
D) Neither statement a nor b is correct.