The basic shortcoming of EBIT-EPS analysis is that this model focuses on the maximization of stock returns rather than on the maximization of share price.

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EBIT-EPS analysis primarily focuses on the effects of financing decisions on earnings per share (EPS) and the overall cost of capital, which indirectly influences the maximization of share price, not just stock returns.

The Basic Shortcoming of EBIT-EPS Analysis Is That This Model