Question: You have computed the break - even point between a levered and an unlevered capital structure. Ignore taxes. At the break - even level, the:

You have computed the break-even point between a levered and an unlevered capital structure. Ignore taxes. At the break-even level, the:
Multiple Choice
Firm is earning just enough to pay for the cost of the debt.
Firm's earnings before interest and taxes are equal to zero.
Earnings per share for the levered option are exactly double those of the unlevered option.
Advantages of leverage exceed the disadvantages of leverage.
Firm has a debt-equity ratio of .50.
You have computed the break-even point between a levered and an unlevered capital structure. Ignore taxes. At the break-even level, the:
Multiple Choice
Firm is earning just enough to pay for the cost of the debt.
Firm's earnings before interest and taxes are equal to zero.
Earnings per share for the levered option are exactly double those of the unlevered option.
Advantages of leverage exceed the disadvantages of leverage.
Firm has a debt-equity ratio of .50.

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