Which Statement Is Correct About Earnings Per Share (EPS)

question 31

Multiple Choice

Which statement is correct about earnings per share (EPS) ?

• A)EPS does not provide decision-useful information to investors.
• B)EPS represents the ordinary share's market value.
• C)EPS represents the company's market value.
• D)EPS can be used to predict future earnings by analysts.

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Definitions:

Amortization

The process of spreading out a loan or intangible asset cost over a specific period of time for accounting and taxation purposes.

Generally Accepted Accounting Principles

A collection of commonly-followed accounting rules and standards for financial reporting.

Straight-Line Method

A way of calculating equal depreciation expenses for an asset over its useful life.