Which of the following statements is false ? (A) Indifference point is the point of sales at which different sets of debt ratios results in same earning per share (B) Indifference point is that level of EBIT below which

CS Executive · Financial and Strategic Management · PYQS · December 2022
Which of the following statements is false ? (A) Indifference point is the point of sales at which different sets of debt ratios results in same earning per share (B) Indifference point is that level of EBIT below which the benefits of financial leverage with respect to EPS exists (C) Indifference point is that level of EBIT beyond which the benefits of financial leverage with respect to EPS extinguishes (D) All of the above
(A) Indifference point is the point of sales at which different sets of debt ratios results in same earning per share
(B) Indifference point is that level of EBIT below which the benefits of financial leverage with respect to EPS exists
(C) Indifference point is that level of EBIT beyond which the benefits of financial leverage with respect to EPS extinguishes
(D) All of the above

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Financial Management

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