Which of the Following Statements Is CORRECTσ

question 55

Multiple Choice

Which of the following statements is CORRECTσ

• A) the more depreciation a firm has in a given year, the higher its eps, other things held constant.
• B) typically, a firm's dps should exceed its eps.
• C) typically, a firm's ebit should exceed its ebitda.
• D) if a firm is more profitable than average (e.g., google), we would normally expect to see its stock price exceed its book value per share.
• E) if a firm is more profitable than most other firms, we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation.

---

Definitions:

Information Flow

The movement or exchange of data, knowledge, and insights among people, processes, or systems within or across organizations.

Outsourcing

The business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company's own employees and staff.

Obtaining Materials

The process of sourcing and procuring the raw materials needed for production or manufacturing.

Outsourcing

The practice of hiring third-party vendors to perform services or produce goods that were previously done internally, often to reduce costs.