You are writing a comparison of an all-equity structure to, Financial Management

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You are writing a comparison of an all-equity structure to

You are writing a comparison of an all-equity structure to a levered capital structure for a firm. It is accurate to state in this comparison that:

earnings per share will always be higher in the all-equity structure.

firms will only select the levered structure when individual rates on borrowed funds are lower than corporate rates.

leverage lowers shareholders' returns in bad times.

the all-equity firm has a greater advantage the higher the firm's earnings before interest.

leverage improves shareholders' returns regardless of the firm's level of earnings.

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Financial Management: You are writing a comparison of an all-equity structure to

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