n an EPS-EBI graphical relationship, why A firm s capital structurethe debt line have a lower vertical intercept point than the no debt line?

Multiple Choice

• The debt line has a negative slope while the no debt line has a positive slope.

• The break-even point is higher with debt.

• The debt line is horizontal while the no debt line has a positive slope.

• With debt, a fixed interest charge is paid out of earnings.

• The debt line has less of a slope than the no debt line.