A Company That Has Earnings in Year 2 Equal to the Earnings

question 10

Multiple Choice

A company that has earnings in Year 2 equal to the earnings of Year 1 can improve its Year 2 reported earnings per share by

• A)selling additional common stock.
• B)selling additional preferred stock.
• C)selling shares of treasury stock at a price exceeding what was paid for the treasury stock.
• D)purchasing shares of treasury stock.

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Definitions:

World's Economy

Describes the global network of economic activities, including production, consumption, and trade of goods and services across different countries.

U.S. Companies

Businesses that are incorporated, operate, or have their primary base of operations within the United States.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale.

Competitive Advantage

The attributes or conditions that allow a company to produce goods or services better or more cheaply than its competitors, leading to a favorable position in the market.