Which of the Following Could Explain Why a Company Has

question 55

Multiple Choice

Which of the following could explain why a company has a lower net profit margin ratio but a higher EPS than one of its competitors?

• A)The company sells a higher percentage of goods on credit.
• B)The company has fewer shares of outstanding common stock relative to its net income.
• C)The company earns a higher percentage of net income from non-operating activities.
• D)The company pays a higher dividend.

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Definitions:

Product Variety

The variety of products or services a company provides or that are accessible in a marketplace.

Cost Diseconomies

Situations where costs per unit increase as a firm's operation scales up, often due to inefficiencies or increased complexity.

Celebrity Endorsement

The practice of using a famous person's support or approval to promote a product or service, leveraging their influence to reach potential customers.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded by consumers at various price levels.