Advertisements
Advertisements
प्रश्न
What happens when RoI is lower than the cost of debt?
पर्याय
EPS rises, allowing unlimited debt use
Interest payments are eliminated
Repayment of principal is eliminated
EPS falls, limiting debt use
MCQ
Advertisements
उत्तर
When RoI is lower than the cost of debt, trading on equity reduces EPS. This limits how much debt the firm should use.
shaalaa.com
या प्रश्नात किंवा उत्तरात काही त्रुटी आहे का?
