Which one of these is related to an increase in the book value of the stockholders' equity in a profitable,non-dividend paying firm? Assume no shares of stock are repurchased or sold.
A)A decrease in the book value of inventory
B)An increase in earnings per share
C)An increase in the market value of the firm's buildings
D)An increase in the market value of the firm's long-term debt
E)An increase in non-cash expenses

Question

Quizplus · Accepted Answer

An increase in earnings per share would result in an increase in the firm's net income, which in turn increases the stockholders' equity. This increase is reflected in the book value of the stockholders' equity. The other options (A, C, D, E) do not necessarily have a direct impact on the book value of stockholders' equity.

Which One of These Is Related to an Increase in the Book