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The Major Shortcoming of the EBIT-EPS Approach to Capital Structure

Question 146

Multiple Choice

The major shortcoming of the EBIT-EPS approach to capital structure is that ________.


A) the technique does not promote the maximization of shareholder wealth
B) the technique does not consider the cost of capital
C) the technique only considers leverage-related risk
D) the technique does not maximize earnings per share

Correct Answer:

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