In EBIT-EPS analysis, the indifference point is found at the point where ____ for the two alternative financing plans is (are) equal.
A) EBIT
B) EPS
C) stock prices
D) DOL

Question

Quizplus · Accepted Answer

The indifference point in EBIT-EPS analysis is the level of Earnings Before Interest and Taxes (EBIT) at which the Earnings Per Share (EPS) are equal for two different financing plans. This helps in determining the most beneficial financing option under varying levels of EBIT.

In EBIT-EPS Analysis, the Indifference Point Is Found at the Point