After Completing an EPS/EBIT Analysis,what Conclusions Would You Make If

question 64

Multiple Choice

After completing an EPS/EBIT analysis,what conclusions would you make if the debt line is above the stock line throughout the range of EBIT on the graph?

• A)Dividends must be considered before conclusions can be made.
• B)The company should be privately owned.
• C)Debt appears to be the best financing alternative.
• D)A combination of debt and stock is probably the best financial alternative.
• E)Stock would be the best financing alternative.

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