Which of the Following Statements Is True of Earnings Per

question 31

Multiple Choice

Which of the following statements is true of earnings per share?

• A)A company must pay tax on the earnings per share.
• B)Earnings per share can be maximized by changing from corporation to proprietorship form of organization.
• C)A company can maximize its value by maximizing earnings per share.
• D)Earnings per share is often used as an indication of the firm's potential for generating future cash flows.
• E)A high earnings per share in the current period results in lower future risk position of the business.

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Definitions:

Negative Reinforcer

An undesirable outcome or event that, when removed after a behavior, increases the likelihood of that behavior occurring in the future.

Positive

Characterized by the presence or possession of certain qualities, attributes, or outcomes, often implying optimism or constructive aspects.

Primary

First in order or development; fundamental to a process or system.

Secondary

Generally refers to the second in order, importance, or stage, often used in different contexts such as education or stages of a process.