A firm's indifference point between debt and equity financing plans would occur when the:
A) amount of debt used is equal to the amount of equity.
B) cost of borrowing is low.
C) cost of borrowed funds equals return on equity.
D) current level of EBIT generates the same EPS under both plans.

Question

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The Answer of A firm's indifference point between debt and equity financing plans would occur when the:
A) amount of debt used is equal to the amount of equity.
B) cost of borrowing is low.
C) cost of borrowed funds equals return on equity.
D) current level of EBIT generates the same EPS under both plans.

A Firm's Indifference Point Between Debt and Equity Financing Plans