Susan is reviewing a graph that plots earnings per share (EPS) against earnings before interest and taxes (EBIT). The relationship she has learned from the graph is that the steeper the slope of the plotted line the. Multiple Choice O lower the impact of financial leverage lower the debt-equity ratio higher the tax rate greater the sensitivity of EPS to changes in EBIT lower the probability of a negative EPS

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Susan is reviewing a graph that plots earnings per share (EPS) against earnings before interest and taxes (EBIT). The relationship she has learned from
the graph is that the steeper the slope of the plotted line the
Multiple Choice
lower the impact of financial leverage
lower the debt-equity ratio
higher the tax rate
greater the sensitivity of EPS to changes in EBIT
lower the probability of a negative EPS
Transcribed Image Text:Susan is reviewing a graph that plots earnings per share (EPS) against earnings before interest and taxes (EBIT). The relationship she has learned from the graph is that the steeper the slope of the plotted line the Multiple Choice lower the impact of financial leverage lower the debt-equity ratio higher the tax rate greater the sensitivity of EPS to changes in EBIT lower the probability of a negative EPS
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