Leverage can ________ a firm's expected earnings per share,but does not necessarily increase the share price.
A)decrease
B)dilute
C)increase
D)not change
E)decrease the variation of

Question

Quizplus · Accepted Answer

Leverage can increase a firm's expected earnings per share because it allows the firm to use debt to finance its operations and investments, which can result in higher profits. However, this doesn't necessarily translate to an increase in the share price as other factors such as market conditions and investor sentiment also play a role in determining stock prices.

Leverage Can ________ a Firm's Expected Earnings Per Share,but Does