___ rises with an increase in debt, only when the ROI is more than the cost of debt.

ROI

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EPS

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Asset

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Debt

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Solution

The correct option is B
EPS

EPS rises with an increase in debt, only when the ROI is more than the cost of debt.

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Similar questions

Financial leverage is called favourable if

(a) Return on investment is lower than the cost of debt

(b) ROI is higher than the cost of debt

(d) If the degree of existing financial leverage is low

Other things remaining the same, an increase in the tax rate on corporate profit will

(a) make the debt relatively cheaper

(b) make the debt relatively the dearer

(d) we can't say

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