When EBIT is positive, high leverage decreases the returns to shareholders (as measured by ROE).
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Q3: There appears to be some connection between
Q4: Nature of assets will affect the optimal
Q5: All else equal, higher financial leverage decreases
Q6: When a firm is operating at its
Q7: D/E ratios are significantly higher today than
Q9: Assume there are no personal or corporate
Q10: When EBIT is positive, increasing financial leverage
Q11: When a firm is operating at its
Q12: All else the same, taxes and bankruptcy
Q13: Suppose we wish to draw a graph
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