Which of the Following Statements Incorrectly Describes Earnings Per Share

question 40

Multiple Choice

Which of the following statements incorrectly describes earnings per share?

• 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:

Complementary Resources

Natural or manufactured materials that work together with another resource in production to create a product or service.

Productivity

A measure of the efficiency of production, often expressed as the ratio of output to input in the production process.

Marginal Revenue Product

The extra income produced by utilizing an additional unit of a resource or production factor.

MRP Curve

The Marginal Revenue Product curve, representing the additional revenue generated by hiring one more unit of a resource in the factor market.