In the Fifth Year of Operations Both Sea Ltd

Multiple Choice

In the fifth year of operations both Sea Ltd. and Air Inc. had EBIT of $6 million. At the end of the year, the degree of financial leverage for Sea had decreased by 10% and for Air by 50%. What conclusion can be drawn from this?

A) EBIT grew more quickly at Sea than at Air.
B) Air has relatively more capital payments than Sea.
C) EPS decreased more rapidly at Sea.
D) EBIT did not change by much at Air.
E) EPS remained at 90% of EBIt at Sea.