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Suppose that firm A expects that the EBIT of the firm will be $ 1 0 , 0 0 0 and $ 3 0 ,

Suppose that firm A expects that the EBIT of the firm will be $10,000 and $30,000 for the worst case and best case, respectively. Under these cases, the ESP is and $2.50 under the worst case, and $7.50 under the best case. This means that Firm A has:
moderately high financial leverage
very high financial leverage
not enough information to decide
below average financial leverage
no financial leverage
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