The EBIT-EPS chart suggests that the higher the debt ratio, the higher are the earnings per share

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The EBIT-EPS chart suggests that the higher the debt ratio, the higher are the earnings per share for any level of EBIT above the indifference point. Why do firms sometimes choose financing alternatives that do not maximize EPS?

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Fundamentals Of Financial Management

ISBN: 9780273713630

13th Revised Edition

Authors: James Van Horne, John Wachowicz

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Question Posted: Dec 07, 2015 05:48 AM

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The EBIT-EPS chart suggests that the higher the debt ratio, the higher are the earnings per share

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The objective of business firms is not to maxi...View the full answer

Fundamentals Of Financial Management

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