What Is a Reason Why Supporters of SVA Believe That

question 28

Multiple Choice

What is a reason why supporters of SVA believe that EPS is not a valid measure of shareholder value?

• A) EPS does not include consideration of the interest earnings of lenders.
• B) EPS includes estimated future profits that are, as yet, unearned.
• C) EPS is based on market values rather than the more conservative book values.
• D) EPS does not consider the future value of the shares.
• E) EPS relies on share price rather than solely on quantifiable internal measures.

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Definitions:

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