According to MM, an Increase in Expected Earnings Per Share

question 78

Multiple Choice

According to MM, an increase in expected earnings per share can leave the share price unchanged if the:

• A)Firm's operating risk decreases
• B)Number of shares is decreased
• C)Required return on equity increases
• D)Firm has no financial leverage

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Definitions:

Simplify Expression

The process of altering an expression to make it easier to understand or work with, often by combining like terms and applying arithmetic operations.

Fractional Exponent

An exponent in the form of a fraction, where the numerator indicates a power and the denominator indicates a root.

Simplify Expression

To alter an expression into its simplest form, making it easier to understand or solve by combining like terms and applying mathematical operations.

Radix

The base of a number system; for example, the radix for the decimal system is 10.