The EBIT-EPS indifference point, sometimes called the break-even point, identifies the optimal range of financial leverage regardless of the financing plan chosen by the financial manager.

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The EBIT-EPS indifference point identifies the level of EBIT at which the earnings per share (EPS) are the same whether the company uses debt or equity financing; it does not identify the optimal range of financial leverage.

The EBIT-EPS Indifference Point, Sometimes Called the Break-Even Point, Identifies