An increase in EPS is an indicator of:
A)higher profitability.
B)lower profitability.
C)lower financial leverage.
D)lower return on equity.

Question

Quizplus · Accepted Answer

Current earnings can predict future dividends and stock prices.If a company generates increased earnings in the current year,it will be able to pay higher dividends in future years.In other words,current EPS influences expectations about future dividends,which investors factor into the current stock price.

An Increase in EPS Is an Indicator Of