All else being equal, as debt replaces equity in a profitable company’s capital structure, which of the following occurs? (Points : 1) Interest expense increases, reducing taxable income and reducing taxes. Interest expense increases, reducing net income and earnings per share. Interest expense increases, reducing cash flows available to shareholders.
All else being equal, as debt replaces equity in a profitable company’s capital structure, which of the
following occurs? (Points : 1)
- Interest expense increases, reducing taxable income and reducing taxes.
- Interest expense increases, reducing net income and earnings per share.
- Interest expense increases, reducing cash flows available to shareholders.
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