According to MM, an Increase in Expected Earnings Per Share

question 96

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:

Unpleasant Events

Occurrences that cause discomfort, distress, or unhappiness to an individual or group.

Stress

A physical, mental, or emotional factor that causes bodily or mental tension and may be a factor in disease causation.

Predictable

Capable of being foreseen or declared in advance, especially through analysis or experience.

Rare

Not occurring very often or not common.