3) When firms increase their debt-equity ratio, we find: Group of answer choices The ROE always falls. The EPS always rises. Swings in return of equity (ROE) are smaller. Swings in earnings per share (EPS) are magnified.

3) When firms increase their debt-equity ratio, we find: Group of answer choices The ROE always falls. The EPS always rises. Swings in return of equity (ROE) are smaller. Swings in earnings per share (EPS) are magnified.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter16: Capital Structure Decisions

Section: Chapter Questions

Problem 5MC

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D3) When firms increase their debt-equity ratio, we find: Group of answer choices The ROE always falls. The EPS always rises. Swings in return of equity (ROE) are smaller. Swings in earnings per share (EPS) are magnified.

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Please, use these formulas that are in the image only.