What does Earnings Per Share (EPS) measure?
a) A company’s revenue per share
b) A company’s net income per outstanding share
c) The total dividends paid by a company
d) The market price of a share
How is Basic EPS calculated?
a) Net Income ÷ Total Revenue
b) Net Income ÷ Weighted Average Shares Outstanding
c) Total Dividends ÷ Share Capital
d) Retained Earnings ÷ Total Assets
Which of the following affects the calculation of Diluted EPS?
a) Issued bonds
b) Stock options and convertible securities
c) Cash dividends
d) Accounts payable
Which type of dividend is distributed in the form of additional shares?
a) Cash dividend
b) Stock dividend
c) Interim dividend
d) Liquidating dividend
What happens to Retained Earnings when a cash dividend is declared?
a) Increases
b) Decreases
c) No effect
d) Becomes negative
Which financial statement reports EPS?
a) Balance Sheet
b) Cash Flow Statement
c) Income Statement
d) Statement of Changes in Equity
Which of the following dividends is paid before the final dividend?
a) Liquidating dividend
b) Stock dividend
c) Interim dividend
d) Extra dividend
How is Dividend Per Share (DPS) calculated?
a) Total Dividends Paid ÷ Net Income
b) Total Dividends Paid ÷ Total Shares Outstanding
c) Net Income ÷ Share Capital
d) Dividends Paid ÷ Retained Earnings
Which of the following is NOT a type of dividend?
a) Stock dividend
b) Bond dividend
c) Cash dividend
d) Property dividend
What happens when a company declares a dividend but does not pay it immediately?
a) No accounting entry is required
b) It increases retained earnings
c) A liability is created
d) Share capital is reduced
Which date determines the shareholders eligible to receive dividends?
a) Declaration date
b) Record date
c) Payment date
d) Ex-dividend date
What does a high EPS generally indicate?
a) Low profitability
b) High profitability
c) High expenses
d) Low revenue
Which of the following reduces the EPS of a company?
a) Issuing new shares
b) Declaring dividends
c) Increasing net income
d) Buying back shares
What is the impact of stock dividends on total shareholders’ equity?
a) Increases equity
b) Decreases equity
c) No effect
d) Converts equity to liability
Which financial ratio is often used along with EPS to assess stock valuation?
a) Price-to-Earnings (P/E) Ratio
b) Quick Ratio
c) Debt-to-Equity Ratio
d) Return on Assets (ROA)
If a company has net income of $500,000 and 100,000 outstanding shares, what is its EPS?
a) $50
b) $5
c) $0.50
d) $500
What does the Dividend Payout Ratio measure?
a) The percentage of earnings distributed as dividends
b) The ratio of dividend to share capital
c) The company’s retained earnings
d) The price of a share compared to dividends paid
If a company pays dividends, what happens to its total equity?
a) Increases
b) Decreases
c) No effect
d) Becomes negative
Which type of dividend is issued when a company distributes assets instead of cash?
a) Stock dividend
b) Property dividend
c) Interim dividend
d) Liquidating dividend
What is the primary purpose of paying dividends?
a) To increase net income
b) To distribute profits to shareholders
c) To reduce liabilities
d) To increase company assets
What happens to EPS when a company issues additional shares?
a) Increases
b) Decreases
c) No effect
d) Doubles
If a company retains all its earnings and does not pay dividends, what is its Dividend Payout Ratio?
a) 100%
b) 50%
c) 0%
d) Cannot be determined
Which company action directly increases EPS?
a) Stock split
b) Issuing new shares
c) Buying back shares
d) Paying dividends
What does a negative EPS indicate?
a) The company has a net loss
b) The company is highly profitable
c) The company is growing
d) The company is paying high dividends
Which of the following is NOT included in the calculation of EPS?
a) Net income
b) Preferred dividends
c) Common shares outstanding
d) Cash flow from operations
If a company issues a 10% stock dividend, what happens to the EPS?
a) Increases
b) Decreases
c) No effect
d) Becomes negative
Which of the following would cause an increase in DPS?
a) Increasing the number of shares outstanding
b) Increasing total dividends paid
c) Decreasing net income
d) Increasing retained earnings
