The EBIT-EPS analysis provides a means for managers to quantify and analyze the trade-off between results and risk involved by moving from various levels of leverage.

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Rohitha Bandlamuri · Accepted Answer

Final Answer : True, Explanation :  This statement is true. The EBIT-EPS analysis is a financial tool that helps managers understand the impact of changing levels of leverage (debt) on a company's earnings per share (EPS) and earnings before interest and taxes (EBIT). It allows managers to evaluate different capital structure options and determine the optimal level of debt financing that balances the benefits of increased earnings with the risks associated with higher debt levels.

The EBIT-EPS analysis provides a means for managers to quantify and analyze the trade-off between results and risk involved by moving from various levels of leverage.

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