Which of the following statements is true? A) A graph of the relation

Which of the following statements is true?

A) A graph of the relationship between EPS and EBIT is steeper when the firm is leveraged.
B) At the indifference point on an EPS-EBIT graph, two financing alternatives provide the same EBIT.
C) Firms are more likely to use greater levels of debt when predicted EBIT is low.
D) In EPS-EBIT analysis, EPS is considered a poor proxy for firm value.
E) None of the above.

ANSWER

A