An Increase in a Firm's Number of Shares Outstanding Without

question 46

Multiple Choice

An increase in a firm's number of shares outstanding without any change in owners' equity is called a:

• A) special dividend.
• B) stock split.
• C) share repurchase.
• D) tender offer.
• E) liquidating dividend.

Recognize the budget process as a continuous activity involving planning, revising, and evaluating.

Differentiate between traditional and activity-based budgeting approaches.

Understand the relationship between cash, capital expenditures, and financial budgets.

Calculate budgeted purchases based on inventory and cost of goods sold figures.

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Definitions:

Equity Multiplier

A financial ratio indicating the proportion of a company's assets that are financed by stockholders’ equity, showing the level of financial leverage.

Earnings Per Share

A company's net profit divided by the number of its outstanding shares, indicating the profitability per share.

Price-Earnings Ratio

A financial metric used to evaluate a company's share price relative to its earnings per share, helping investors assess the market value of a stock.

Times Interest Earned

is a financial ratio that compares a company's income before interest and taxes (EBIT) to its interest expenses, indicating how well the company can cover its interest obligations.