Using debt financing to replace equity financing always leads to greater EPS for the firm.

Name: Using debt financing to replace equity financing always leads to greater EPS for the firm.
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Question

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Debt financing can lead to greater EPS if the firm's return on investment is higher than the cost of debt. However, it increases financial risk and interest obligations, which can reduce EPS if the firm's return is lower than the cost of debt or during financial downturns.

Using Debt Financing to Replace Equity Financing Always Leads to Greater