Question: 1 Explain the effect of leverage on EPS and ROEWhat is the break-even EBIT? 2 How do we determine the optimal capital structure? 3 What

1 Explain the effect of leverage on EPS and ROEWhat is the break-even EBIT?

2 How do we determine the optimal capital structure?

3 What is the optimal capital structure in the three cases that were discussed in this chapter?What is the difference between liquidation and reorganization?

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