Which of the Following Statements Incorrectly Describes Earnings Per Share

question 135

Multiple Choice

Which of the following statements incorrectly describes earnings per share (EPS) ?

• A)Earnings per share is a ratio calculated per common share.
• B)An increase in the market price per common share does not result in a decrease in earnings per share.
• C)An increase in dividends per share results in an increase in earnings per share.
• D)The reissue of treasury stock decreases earnings per share.

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Definitions:

Operating Cash Flows

Cash generated from a company's regular business activities, indicating the company’s ability to generate sufficient cash to maintain and expand operations.

Net New Borrowings

The total amount of new debt a company takes on minus any debt repayments, indicating the net change in debt level.

Net Working Capital

The discrepancy between a firm's immediate assets and liabilities, reflecting its short-term fiscal well-being and operational effectiveness.

Depreciation

The systematic allocation of an asset's cost over its useful life to account for wear and tear, obsolescence, or decline in value.