As of November 29,it Appears That Notel Will Report Earnings

question 256

Multiple Choice

As of November 29,it appears that Notel will report earnings per share (EPS) of $1.15 for the quarter ended November 30.Which of the following events would cause this EPS number to decrease,assuming the event occurs the morning of November 30?

• A)The company pays a supplier for inventory bought on account.
• B)The company declares,but does not pay,a cash dividend.
• C)The company purchases 10 shares of common stock in another company.
• D)The company reissues the treasury stock it holds.

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Definitions:

Cumulative Preferred Stock

A type of preferred stock where dividends accrue if not paid in a given year, and all accrued dividends must be paid before dividends can be paid on common stock.

Dividends

A portion of a company's earnings that is paid to shareholders, usually on a quarterly basis.

Common Shareholders

Individuals or entities that own a portion of a company's equity through its common shares, giving them voting rights and a claim on a portion of its profits.

Payout Ratio

The proportion of earnings paid out as dividends to shareholders, typically expressed as a percentage of the company's total net income.