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You have computed the break-even difference point for two firms: one with debt in its capital structure and the other with no debt in its
You have computed the break-even difference point for two firms: one with debt in its capital structure and the other with no debt in its capital structure. Assume there are no taxes. At the break-even/ indifference point, the:
a. the two firms have an EBT equal to zero
b. the advantage of leverage exceed the disadvantage of leverage
c. the two firms have the same EBIT and EPS
d. Both firms have the same debt ratio
e. The two firms have the same earnings per share (EPS)
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