Earnings per share (EPS) is an indicator of a company’s profitability and how its stocks are valued. EPS of a company is directly proportional to its net income. The net income of Tolut Inc. for this year has decreased by 10 percent from last year’s figures. Therefore, the company’s EPS would be less than what it was last year.
Which of the following statements, if true, strengthens the argument??
A. ?Tolut Inc.’s stocks were undervalued in the market last year.
b. ?A high EPS indicates that the company has a high potential for growth in the future.
c. ?Earnings per share do not necessarily fall every time there is a rise in the taxes paid by the company.
d. ?Tolut Inc. has issued additional common shares in the current year.