Leverage Can Increase a Firm's Expected Earnings Per Share, but Does

question 106

True/False

Leverage can increase a firm's expected earnings per share, but does not necessarily increase the share price.

---

Definitions:

Opportunity Cost

The worth of the best option not chosen due to a decision being made.

Concert Costs

Expenses associated with organizing, promoting, and hosting a live music performance.

Resell

The act of selling a purchased good or service to another party, often for a price higher than the original purchase price.

Price Differential

The variation in the price of a product or service in different markets or purchase conditions.