Quiz – Which of the following statements is CORRECT?

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition and 10th Edition

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Which of the following statements is CORRECT?
a. Typically, a company’s dividends per share, DPS, should be larger than its earnings per share, EPS.
b. A firm’s net income should exceed its EBIT, usually.
c. If a firm is more profitable than average, we would normally expect to see its stock price exceed its book value per share.
d. If a firm is more profitable than other companies, we expect to see its book value per share (BVPS) to exceed its stock price, this is true after high inflation.
e. The more depreciation a firm has in a given year, the higher its EPS.

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