A Firm Is Expected to Generate $1

question 50

Multiple Choice

A firm is expected to generate $1.5 million in operating income and pay $250,000 in interest.Ignoring taxes,this will generate $12.50 earnings per share.What will happen to EPS if operating income increases to $2.0 million?

• A) EPS will increase to $15.63.
• B) EPS will increase to $16.67.
• C) EPS will increase to $17.50.
• D) EPS will increase to $20.00.

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