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Basic Question 12 of 19

In the absence of ______, a percentage change in EBIT causes the same percentage change in net income and EPS.

A. financial leverage
B. fixed operating expenses
C. operating leverage
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User Contributed Comments 1

User Comment
setmefree when there's no interest expense, EBIT*(1-t) = net income = EPS * number of outstanding shares
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Edward Liu

Edward Liu

Learning Outcome Statements

explain factors affecting capital structure and the weighted-average cost of capital

CFA® 2024 Level I Curriculum, Volume 2, Module 6.