Assume an unlevered company chooses to alter its capital structure by adding debt and using the debt proceeds to reduce shares outstanding as to leave total invested capital unchanged. Absent any other changes, the company's earnings before interest and taxes (EBIT) can be expected to:

Group of answer choices

increase.

decrease.

remain unchanged.

Assume an unlevered company chooses to alter its capital structure by adding debt and using the debt proceeds to reduce shares outstanding as to leave total invested capital unchanged. Absent any other changes, which of the following statements is correct?

Group of answer choices

Firm value wil decrease.

Net income will increase.

Taxes on earnings will decrease.