Question
If debt financing is used, which of the following is TRUE? a. The percentage change in net income relative to the percentage change in net
If debt financing is used, which of the following is TRUE?
a.
The percentage change in net income relative to the percentage change in net operating income (EBIT) depends on the interest rate charged on debt.
b.
The percentage change in net operating income (EBIT) is equal to a given percentage change in net income.
c.
The percentage change in net operating income (EBIT) is less than the percentage change in net income.
d.
The percentage change in net operating income (EBIT) is greater than a given percentage change in net income.
e.
The degree of operating leverage is greater than 1.
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Research Methods Statistics and Applications
Authors: Kathrynn A. Adams, Eva Marie K. Lawrence
1st edition
1452220182, 978-1452220185
