All Other Things Equal, What Is the Effect on Earnings

question 14

Multiple Choice

All other things equal, what is the effect on earnings per share when a corporation acquires shares of its own stock on the open market?

• A) Decrease.
• B) No effect if the shares are held as treasury shares.
• C) Increase only if the shares are considered to be retired.
• D) Increase.

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Definitions:

Embryonic Period

The stage of prenatal development from about the second to the eighth week after conception, where major organs and structures begin to develop.

Behavioral State

refers to an individual's current condition or manner of acting that encompasses emotional, arousal, and readiness to respond states.

Gestation

The period of development between conception and birth when a fetus develops inside the mother’s uterus.

Quiet Sleep

A sleep phase in infants characterized by minimal movement and a steady breathing pattern, also referred to as non-REM sleep.