We are asked to evaluate the limit $$\lim_{x \rightarrow \infty}\frac{e^x}{{\left(1+\frac1x\right)}^{x^2}} $$ Applying L'Hospital's rule, we get the correct answer to be $\sqrt e$. However if we apply the usual rules to perform algebra on limits, i.e. limit of quotients is quotient of limits and the fact that limit of a function raised to a function is distributed over the respective functions, we can see that the denominator becomes $e^{lim_{x\rightarrow \infty} x}$ and thus the final limit becomes $1$.
I am simplifying the denominator like this $-$ $$\lim {(1+1/x)}^{x^2}=\lim {((1+1/x)^x)}^x=\lim e^{\lim x}$$
To further clarify, the limit transforms thus $-$ $$\frac {e^{\lim x}}{e^{\lim x}}=e^{\lim x-\lim x}=e^{\lim(x-x)}=e^0=1$$ where the first line follows from quotient and power rule of limits.
What am I doing wrong?