Question

How does EBIT - EPS analysis help financial manager to choose optimal capital structure. Clarify with

the help of example​

Answer 1

Answer:

Explanation:

EBIT-EPS analysis is advantageous in selecting the optimum mix of debt and equity. By emphasizing on the relative value of EPS, this analysis determines the optimum mix of debt and equity in the capital structure.

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Answer 2

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Explanation:

By emphasizing on the relative value of EPS, this analysis determines the optimum mix of debt and equity in the capital structure. It helps determine the alternative that gives the highest value of EPS as the most profitable financing plan or the most profitable level of EBIT as the case may be.