Dilution of Earnings Occurs Because

question 61

Multiple Choice

Dilution of earnings occurs because:

• A) a new issue of common stock creates more shares outstanding that reduces earnings per share temporarily.
• B) the company suffers a decline in earnings after taxes.
• C) the investment dealer collects an underwriting fee.
• D) poor financial performance leading to reduced earnings.

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Definitions:

Psychoanalytic Theory

A theoretical approach in psychology that emphasizes unconscious processes and childhood experiences in shaping personality and behavior.

Ego Suppression

The deliberate or unconscious effort to control or diminish the influence of the ego, often to reduce conflict or promote psychological growth.

Sweat-Gland Activity

The physiological function of producing and secreting sweat through the skin's glands, often in response to heat or stress.

Perceptual Defense

The process of failing to perceive stimuli that an individual might find disturbing or threatening.