Practice free →
Home › CBSE Class 12 (Commerce) › Business Studies › Financial Management › If RoI is below the interest rate, more debt doe…

If RoI is below the interest rate, more debt does what to EPS?

ARaises the EPS
BKeeps EPS unchanged
CDoubles the EPS
DReduces the EPS
Answer & Solution
Correct answer: D. Reduces the EPS
When return on investment is less than the cost of debt, leverage is unfavourable and EPS falls.
Solve this in the app — CBSE Class 12 (Commerce) practice & 24k+ MCQs →
Related questions