Weaknesses of the EBIT-EPS Analysis Include

question 27

Multiple Choice

Weaknesses of the EBIT-EPS analysis include

• A)that it disregards the implicit costs of debt financing.
• B)that it ignores the effect of the specific financing decision on the firm's cost of ordinary equity capital.
• C)that it considers only the level of the earnings stream and ignores the variability inherent in it.
• D)all of the above.

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