15. Which one of the following statements is wrong concerning the relationship between a levered and an
unlevered capital structure? Ignore taxes.
(A) At the break-even point, there is no advantage to debt.
(B) The earnings per share will equal zero when EBIT is zero for a levered firm.
(C) The advantages of leverage are inversely related to the level of EBIT.
(D) EPS are more sensitive to changes in EBIT when a firm is unlevered.
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