Increased use of debt, holding all else the same, causes the variability of EPS to:

Name: Increased use of debt, holding all else the same, causes the variability of EPS to:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Increased use of debt increases the financial leverage of a company. This means that while debt can amplify returns when a company performs well, it also increases the risk and variability of earnings per share (EPS) because the company must make interest payments regardless of its financial performance.

Increased Use of Debt, Holding All Else the Same, Causes