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7 August, 02:53

The primary weakness of EBITminusEPS analysis is that

A. it double counts the cost of debt financing.

B. it applies only to firms with large amounts of debt in their capital structure.

C. it may only be used by firms that are profitable this year.

D. it ignores the implicit cost of debt financing.

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Answers (1)
  1. 7 August, 03:18
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    D. it ignores the implicit cost of debt financing.

    Explanation:

    EBIT-EPS analysis is a technique used to determine the optimal capital structure in which the value of earnings per share (EPS) has the highest amount for a given amount of earnings before interest and taxes (EBIT).
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Home » Business » The primary weakness of EBITminusEPS analysis is that A. it double counts the cost of debt financing. B. it applies only to firms with large amounts of debt in their capital structure. C. it may only be used by firms that are profitable this year. D.
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