If Two Firms Have the Same Expected Earnings Per Share

question 64

True/False

If two firms have the same expected earnings per share (EPS)and the same standard deviation of expected EPS,then they must have the same amount of business risk.

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Definitions:

Drawer

In banking and finance, the person who writes or draws a check, draft, or bill of exchange.

Drawee

The party in a transaction upon whom a check, draft, or bill of exchange is drawn and who is directed to pay.

Unqualified Endorsements

Signatures on a negotiable instrument without any limiting conditions, which transfer full control of the instrument to another party.

Types

Refers to the various categories or distinct forms that objects, concepts, or persons can be classified into.