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All other things being equal, debt: Reduces the sensitivity of a firms earnings per...

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Finance

All other things being equal, debt:

  1. Reduces the sensitivity of a firms earnings per share to changes in its EBIT
  2. Increases the sensitivity of a firms earnings per share to changes in its EBIT
  3. Has no effect on the sensitivity of a firms earnings per share to changes in its EBIT
  4. Reduces the sensitivity of a firms earnings per share to changes in its EBIT when EBIT increases above the break-even EBIT
  5. None of the above

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