For an All Equity Firm

question 74

Multiple Choice

For an all equity firm,

• A) As earnings before interest and taxes (EBIT) increases, the earnings per share (EPS) increases by the same percent
• B) As EBIT increases, the EPS increases by a larger percent
• C) As EBIT increases, the EPS decreases
• D) None of the above

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Definitions:

Lowest Opportunity Cost

The situation where the choice made uses the least possible sacrifice of alternatives, having the minimal foregone benefits among all options.

Produce More

The act of increasing the output or quantity of goods or services produced by a company, entity, or individual.

Trade Restrictions

Government-imposed limitations on the free exchange of goods and services between countries.

Unilaterally

Acting or done by one side alone without agreement or consultation with others.