When Comparing Levered Versus Unlevered Capital Structures,leverage Works to Increase

Multiple Choice

When comparing levered versus unlevered capital structures,leverage works to increase EPS for high levels of EBIT because interest payments on the debt

A) increase as EBIT increases.
B) stay fixed,leaving more income to be distributed over fewer shares.
C) stay fixed,leaving less income to be distributed over fewer shares.
D) stay fixed,leaving less income to be distributed over more shares.
E) decrease as EBIT increases.