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:

Red Beryl

A rare mineral that is red in color and is composed of beryllium, aluminum, and silicate.

Monopoly Power

The ability of a single seller in a market to control the prices of goods or services, usually due to lack of competition.

Local Water Company

A utility firm responsible for the supply and management of water within a specific local area.

Natural Monopoly

A market structure where a single firm can provide a product or service at a lower cost than any potential competitor, often due to economies of scale.