EBIT-EPS analysis tells management exactly how much leverage to use.

Name: EBIT-EPS analysis tells management exactly how much leverage to use.
Brand: Quizplus
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Quizplus · Accepted Answer

EBIT-EPS analysis does not tell management exactly how much leverage to use, but rather helps management understand the effect of different levels of leverage on EPS. The decision on how much leverage to use should also take into account other factors such as risk tolerance, cost of debt, and variability of earnings.

EBIT-EPS Analysis Tells Management Exactly How Much Leverage to Use