All else equal,when the current price for a company's stock falls and net income falls:
A)EPS decreases and ROE increases.
B)EPS and ROE both decrease.
C)EPS increases and ROE decreases.
D)EPS and ROE both increase.

Question

Quizplus · Accepted Answer

When the current price for a company's stock falls and net income falls, EPS (Earnings Per Share) and ROE (Return on Equity) both decrease because the net income (numerator) decreases and the number of outstanding shares (denominator) remains the same. This results in lower EPS and ROE.

All Else Equal,when the Current Price for a Company's Stock