Regarding the financial leverage, which of the following statements is true?

I. The concept of leverage is linear because an increase in EBIT increases EPS

II. The concept of leverage is linear because a decrease in EBIT decreases EPS

III. The response of EPS is more than proportional to a change in EBIT

IV. The response of EPS is proportional to a change in EBIT

a.

I, II, III & IV

b.

I, II, III only

c.

II & III only

d.

I & IV only