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Relationship high debt ratios

"One type of leverage affects both EBIT and EPS. The other type affects only EPS." Explain this statement.Why is the followings statement true? "Other things being the same, firms with relatively stable sales are able to carry relationship high debt ratios."

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Finance Basics: Relationship high debt ratios

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Relationship high debt ratios

Reference No:- TGS0559311

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Expected total net income

Q : Estimated cash payback period for machine

Q : What is the year one operating cash flow

Q : The tax effect of the discontinued operation

Q : Relationship high debt ratios

Q : Evaluate the risk of loss and the opportunity for profit

Q : The estimated uncollectible accounts expense

Q : How business use hedging to protect sources of raw materials

Q : What is the amount of interest that will be paid

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Solution Preview :

Prepared by a verified Expert

Finance Basics: Relationship high debt ratios

Reference No:- TGS0559311

Recent Questions Asked Finance Basics

Q : Expected total net income

Q : Estimated cash payback period for machine

Q : What is the year one operating cash flow

Q : The tax effect of the discontinued operation

Q : Relationship high debt ratios

Q : Evaluate the risk of loss and the opportunity for profit

Q : The estimated uncollectible accounts expense

Q : How business use hedging to protect sources of raw materials

Q : What is the amount of interest that will be paid

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