Dilution of Earnings Occurs Because

question 64

Multiple Choice

Dilution of earnings occurs because

• A) a new issue of common stock creates more shares outstanding, which often reduces earnings per share temporarily.
• B) the company suffers a decline in earnings after taxes.
• C) the investment banker collects an underwriting fee.
• D) all of these options are correct.

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Definitions:

Eukaryotic

Pertains to cells or organisms that have a nucleus enclosed within membranes, distinguishing them from prokaryotic cells which do not.

Microorganisms

Tiny, often microscopic, life forms, including bacteria, viruses, fungi, and some algae and protozoa, that can be found in virtually all environments.

Protozoans

Single-celled eukaryotic organisms, often parasitic or free-living in water or moist environments, capable of movement and feeding on organic substances.

Haemophilus Influenzae

A type of bacteria that can cause various infections, especially in children, ranging from mild ear infections to serious conditions like meningitis.