Chapter 16, capital structure policy. After studying this chapter you will be able to: Explain how financial leverage affects earnings per share (EPS) and return on equity (ROE), compute the degree of financial leverage, define and compute the indifference earnings before interest and taxes (EBIT) and explain its importance in selecting between alternative financing opportunities, define and explain the term homemade leverage, explain why determining the optimal capital structure is important,. | Lecture Fundamentals of corporate finance (3/e): Chapter 16 - Robert Parrino, David S. Kidwell, Thomas Bates
