The Primary Weakness of EBIT-EPS Analysis Is That

question 63

Multiple Choice

The primary weakness of EBIT-EPS analysis is that

• A) it ignores the implicit cost of debt financing.
• B) it double counts the cost of debt financing.
• C) it applies only to firms with large amounts of debt in their capital structure.
• D) it may only be used by firms that are profitable this year.

---

Definitions:

Elementary Schoolchild

A child who attends elementary or primary school, typically in the age range of five to eleven years, focusing on foundational academic, social, and emotional skills.

Preschooler

A child typically between the ages of three and five years old who is in the developmental stage preceding formal schooling.

Adolescent

A person in the developmental stage of adolescence, typically between the onset of puberty and legal adulthood, characterized by significant physical, psychological, and social changes.

Parental Influence

The effect that parents have on the development, behavior, and personality of their children.