Which One of These Best Supports the Argument That Leverage

Multiple Choice

Which one of these best supports the argument that leverage increases shareholder risk?

A) EPS is directly related to EBIT.
B) Individuals employ homemade leverage.
C) EPS variability increases when leverage is used.
D) Firm values rise with leverage in the presence of taxes.
E) The number of shares outstanding tends to decrease when leverage is used.