The steeper the slope of the EBIT-EPS capital structure line, the lower is the financial risk.

Name: The steeper the slope of the EBIT-EPS capital structure line, the lower is the financial risk.
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The steeper the slope of the EBIT-EPS capital structure line, the higher the financial risk. This is because a steeper slope implies that a relatively small change in EBIT can lead to a large change in EPS, indicating that the firm is highly leveraged and therefore more vulnerable to fluctuations in earnings.

The Steeper the Slope of the EBIT-EPS Capital Structure Line