Question: A firm is considering two different capital structures, one with 3 0 percent leverage and one that is all - equity. Under these structures, the
A firm is considering two different capital structures, one with percent leverage and one that is allequity. Under these structures, the firm expects to operate at its breakeven EBIT. Which capital structure should the firm select if it prefers the structure with the highest earnings per share?
The firm can select either structure as the EPS will be equal for both structures.
The firm should select the unleveraged capital structure.
The firm should select the leveraged capital structure.
The firm should select only a capital structure.
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