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:

Light Smoker

An individual who smokes fewer cigarettes compared to the average smoker, often defined as smoking less than 10 cigarettes per day.

Quit Smoking

The process of stopping the habit of inhaling smoke from burning tobacco products.

Smokers

Individuals who habitually inhale smoke from substances such as tobacco, often leading to dependence and health risks.

Quit

To stop or discontinue an action or habit, often referring to the cessation of harmful behaviors like smoking.