Question: Firm A has increased its EPS (Earnings per share) by increasing the weighting of debt in its capital structure, compared to competitor Firm B, which

Firm A has increased its EPS (Earnings per share) by increasing

Firm A has increased its EPS (Earnings per share) by increasing the weighting of debt in its capital structure, compared to competitor Firm B, which finances mainly through increased stock offerings. Firm A's EPS, relative to competitor firm B has improved because: Its value as a firm is greater Its number of shares outstanding is lower Its number of shares outstanding are lower, and its earnings after tax is higher Its net income is higher

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