If in a particular situation, the earnings per share (EPS) falls with the increased use of debt, it indicates that

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Ram Sharma

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Q. If in a particular situation, the earnings per share (EPS) falls with the increased use of debt, it indicates that

(A) The rate of return on investment (Rol) is less than the cost of debt.
(B) The rate of return on investment is more than the cost of debt.
(C) The cost of debt is less than the rate of return on investment.
(D) None of the above

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✅ Correct Answer: (A) The rate of return on investment (Rol) is less than the cost of debt.

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