According to MM, an Increase in Expected Earnings Per Share

question 96

Multiple Choice

According to MM, an increase in expected earnings per share can leave the share price unchanged if the:

• A) firm's operating risk decreases.
• B) number of shares is decreased.
• C) required return on equity increases.
• D)firm has no financial leverage.

---

Definitions:

Positive Reference Group

A group that individuals admire and wish to be like or be associated with, influencing their behavior and attitudes positively.

Weight-of-numbers Bias

A cognitive bias where the sheer amount of information or data points available influences the perception of an argument's strength.

Minority Influence

Social influence processes whereby numerical or power minorities change the attitudes of the majority.

Asch's Study

A social psychology experiment by Solomon Asch that demonstrated the influence of group pressure on conformity.