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Choose the most correct answer to finish the following statement. For debt financing to increase expected return on equity (ROE), a.The basic earning power (BEP)

Choose the most correct answer to finish the following statement. For debt financing to increase expected return on equity (ROE),

a.The basic earning power (BEP) ratio (EBIT/TA) must exceed the interest rate.

b. The interest rate of the debt must exceed the BEP.

c. Leveraging works under all circumstances as long as banks are willing to lend money to the business.

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