An analytical technique called ____ can be used to help determine how much leverage a firm should use.
A)DFL-EPS analysis
B)EBIT-EPS analysis
C)DOL-EPS analysis
D)DOL-EBIT analysis

Question

Quizplus · Accepted Answer

The EBIT-EPS analysis helps determine the appropriate amount of leverage for a firm by calculating the level of EBIT needed to cover the interest payments on debt and analyzing the impact of changes in EBIT on EPS. This analysis considers both the cost and benefit of using leverage and can help a firm make informed financing decisions.

An Analytical Technique Called ____ Can Be Used to Help