Which of the following statements is TRUE?
◦ A graph of the relationship between EPS and EBIT is steeper when the firm is leveraged.
◦ At the indifference point on an EPS-EBIT graph, two financing alternatives provide the same EBIT.
◦ Firms are more likely to use greater levels of debt when predicted EBIT is low.
◦ In EPS-EBIT analysis, EPS is considered a poor proxy for firm value.
◦ None of these.