EBIT-EPS analysis is used to examine the effect of alternative plans of capital financing on the firms earnings per share (EPS), assuming a range of values for the firms level of earnings before interest and taxes (EBIT). The results can be generated and presented using either a mathematical or a graphical solution.

What information is needed to perform an EBIT-EPS analysis? Check all that apply.

-The number of common shares outstanding and, if appropriate, the expected future preferred stock dividend distribution under the current capital structure and each of the proposed financing plans

-The firms degree of operating leverage (DOL)

-Projections regarding the firms future EBIT levels

-The firms expected future interest expense and tax rate under the current capital structure and each of the proposed financing plans