Final answer:
Higher financial leverage means that a given increase in Earnings Before Interest and Taxes (EBIT) will result in a more significant increase in Earnings Per Share (EPS) due to the magnification effect of fixed debt costs. Therefore correct option is C
Step-by-step explanation:
The question pertains to the impact of financial leverage on a company's earnings. Financial leverage refers to the use of borrowed funds to finance the acquisition of assets, with the expectation that the income generated from those assets will be greater than the cost of borrowing.
The correct answer to the question “Higher financial leverage causes to increase more for a given increase in...” is (c) EPS; EBIT. This means that for a company with higher financial leverage, a given increase in Earnings Before Interest and Taxes (EBIT) will result in a greater increase in Earnings Per Share (EPS) because the fixed cost of debt magnifies the effect of changes in EBIT on the bottom line (EPS).