What are the major limitations of ebit eps analysis

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Reference no: EM131336966

1. Is it possible for a firm to have a high degree of operating leverage and a low level of business risk? Explain.

2. Is it possible for a firm to have a high degree of combined leverage and a low level of total risk? Explain.

3. What are the major limitations of EBIT-EPS analysis as a technique to determine the optimal capital structure?

4. In practice, how can a firm determine whether it is operating at (or near) its optimal capital structure?

Reference no: EM131336966

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