382 CHAPTER 9 For the Iveo P9-14 Answer the following mulriple choice questions tively, In 2011, Zoret Company declared a 4-for I stock split. For the wernd s Compuny reported carnings of $0.30 per share. The appropriate earnin tation for a three-year comparative analysis a. In 2009 and 2010, Zorer Company reported carnings per share of So.o that incliudes 2009, 2010, and 20 2009 2011 2010 S0.s $0.20 50.20 1.20 50.2553.20 1.20 $4.0053.20 50.30 $0.30 5o.30 $02 $4.00 3, s0.25 5. b. The degree of financial leverage for Zorro Company was 1,50 when ERm $1,000,000. IF EBIT goes to $2,000,000, the accompanying change in ne 1. $2,500,000. 2. $3,000,000 3. $2,000,000. 4. $1,500,000. 5. $1,000,000. In 2012, Zello Company declared a 10% stock dividend. In 2011, was $1.00. When the 2011 earnings per share is disclosed in the 2012 amau c. will be disclosed at 1. $1.00. 2. $1.10. 3. $1.20. 4. $0.91. 5. $0.81 d. Which of the following ratios usually reflects investors' opinions of the future for the firm? 1. Dividend yield 2. Book value per share 3. Pricelearnings ratio 4. Earnings per share 5. Dividend payout Which of the following ratios gives a perspective on risk in the capital stracture e. 1. Book value per share 2. Dividend yield 3. Dividend payout 4. Degree of financial leverage 5. Pricelearnings ratio The earnings per share ratio is computed for 1. Convertible bonds. 2. Redeemable preferred stock. 3. Common stock. 4. Nonredeemable preferred stock 5. None of the above. f. g. Increasing financial leverage can be a risky strategy from the viewpoint of stod of companies having 1. Steady and high profits. 2. Low and falling profits. 3. Relatively high and increasing profits. 4. A low debulequity ratio and relatively high profits 5. None of the above