Which of the Following Is Correct for a Firm with EPS

question 1

Multiple Choice

Which of the following is correct for a firm with EPS of $2.00 per share and a 45% payout ratio?

• A) 45% of earnings will be plowed back into the firm.
• B) Dividends will equal $1.10 per share.
• C) Book value per share of equity will increase by $1.10.
• D) Retained earnings will be unchanged.

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Definitions:

De-Emphasize

The act of making something appear less important or prominent in a communication or discussion.

Disadvantages

The negative aspects or conditions that reduce effectiveness, efficiency, or desirability.

Proposed Solution

A recommendation or plan put forward to solve a problem or address an issue.

Chronological Report

A report that presents events or progress in the order in which they occurred, from earliest to most recent.