Which One of the Following Will Result from a Stock

question 19

Multiple Choice

Which one of the following will result from a stock repurchase?

• A)Increase in the number of shares outstanding
• B)Decrease in the earnings per share
• C)Decrease in the market price per share
• D)Increase in the market value of equity per share
• E)Decrease in the PE ratio

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Definitions:

Interest Paid

This is the amount of money paid by a borrower to a lender in return for the use of borrowed money, usually expressed as a percentage of the principal.

Effective Rate

The actual interest rate an investor earns or pays on an investment or loan, taking into account the effect of compounding.

Nominal Rate

Nominal Rate is the interest rate before adjustments for inflation, reflecting the actual monetary cost of borrowing.

Opportunity Cost

Missing out on possible advantages from other choices when a specific choice is made.