1461. Trading on equity is _________.

A. Always beneficial
B. May be beneficial *
C. Never beneficial
D. None of the above

1462. Benefit of ” Trading on equity” is available only if ________.

A. Rate of interest < Rate of return *
B. Rate of interest > Rate of return
C. Both A and B
D. None of A and B

1463. Indifference level of EBIT is one at which ________.

A. EPS is zero
B. EPS is minimum
C. EPS is highest
D. None of these *

1464. Financial break-even level of EBIT is one at which _________.

A. EPS is one
B. EPS is zero *
C. EPS is infinite
D. EPS is negative

1465. Relationship between change in sales and D operating profit is known as _________.

A. Financial leverage
B. Operating leverage *
C. Net profit ratio
D. Gross profit ratio

1466. If a firm has no preference share capital, financial break-even level is defined as equal to _______.

B. Interest liability *
C. Equity divident
D. Tax liability

1467. At indifference level of EBIT, different capital have _________.

A. same EBIT
B. Same EPS *
C. Same PAT
D. Same PBT

1468. Which of the following is not a relevant factor M EPS analysis of capital structure ?

A. Rate of interest on debt
B. Tax Rate
C. Amount of preference share capital
D. Dividend paid last year *

1469. For a constant EBIT, If the debt level is further increased then _______.

A. EPS will always increase
B. EPS may increase *
C. EPS will never increase
D. None of the above

1470. Between two capital plans, if expected EBIT is more than indifference level of EBIT, then_________.

A. Both plans be rejected
B. Both plans are good
C. One is better than other *
D. None of the above