An Increase in the Number of Shares of Common Stock

question 322

True/False

An increase in the number of shares of common stock outstanding will increase a company's price-earnings ratio if the market price per share remains unchanged.

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Definitions:

Total Variable Cost

Total Variable Cost is the sum of all costs that vary directly with the level of production or sales volume; they increase as production increases and decrease as production decreases.

Mark-Up Percentage

A financial ratio indicating the percentage by which a product's selling price exceeds its cost, used to determine selling prices.

Time And Material Pricing

A pricing method where a service provider charges based on the labor time involved and the cost of materials used.

Labour Used

Refers to the total amount of work done or number of hours worked by employees in a specific period.