If a Company's EPS and ROE Rise

question 82

Multiple Choice

If a company's EPS and ROE rise:

• A)it could mean that net income is rising or it could mean that the number of outstanding shares is falling.The first is sustainable; the second cannot be continued indefinitely.
• B)it means that the company is becoming more profitable and shareholders will see greater returns.
• C)it means that the company's tax liability will rise in the future and cause a decline in profitability.
• D)it could mean that net income is rising or it could mean that the number of outstanding shares is falling.In either case,shareholders can expect greater future returns indefinitely.

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Definitions:

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