Aircraft Canada expects sales and net income to remain constant next year. If Aircraft Canada wishes to increase its earnings per share ﬁgures, then Aircraft Canada could:
A) Increase the amount of dividend paid per share.
B) Decrease the amount of dividend paid per share.
C) Purchase more assets.
D) Issue additional shares of common stock.
E) Repurchase outstanding shares of common stock.

Question

Quizplus · Accepted Answer

Repurchasing outstanding shares of common stock can increase earnings per share as the net income is divided among fewer outstanding shares. This can also signal to investors that the company views their shares as undervalued and may lead to an increase in share price.

Aircraft Canada Expects Sales and Net Income to Remain Constant