The number of authorized shares of a company will affect its earnings per share ratio.

Question

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The number of authorized shares does not directly affect the earnings per share ratio. The earnings per share ratio is calculated by dividing the company's net profit by the number of outstanding shares. The number of authorized shares represents the maximum number of shares a company is allowed to issue and is typically set in the company's charter or articles of incorporation. It does not necessarily reflect the actual number of shares issued or outstanding.

The Number of Authorized Shares of a Company Will Affect