If a Firm Has No Debt and EBIT Increases by 10

question 24

Multiple Choice

If a firm has no debt and EBIT increases by 10%, then one can expect ____.

• A)EPS to increase by more than 10%
• B)ROE to increase by less than 10%
• C)net income to increase by 10%
• D)ROCE to be less than ROE

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Definitions:

Fundamental Attribution Errors

The tendency to overemphasize personality-based explanations for behaviors observed in others while underemphasizing the role of situational factors.

Situational Attribution

Attributing a behavior to some external cause or factor operating within the situation; an external attribution.

Social Psychology

The scientific study of how individuals think, feel, and behave in social contexts.

Imagined Presence

The psychological phenomenon of feeling or sensing that another person or entity is present when they are not.