Q215
The value of EBIT at which EPS is equal to zero is known as ____________.
A.
Break-even point
B.
Financial break-even point
AnswerC.
Operating break-even point
D.
Overall break-even point
Answer: Option B
Solution
Answer: Option B
Solution:
The value of EBIT at which EPS is equal to zero is known as Financial break-even point. Financial break-even point is the level of earnings before interest and taxes that will result in zero net income or zero earnings per share. It equals the company's interest expense plus dividends paid to preferred stock-holders and associated taxes.