direct method The solution QUESTIONS 03.1 Q.12 033 Building Shareholder Value. Describe at least three ways that corporate value increase their firm's share price). Rank-order the various managerial action to their effectiveness in building shareholder value. Be prepared to justify your ne Litigation Disclosure. Mylan NV, the maker of EpiPens (an allergy treatment), with in 2017 by the Department of Justice because they classified EpiPens as generie. By using sification, it was alleged that Mylan was able to overcharge Medicaid by over S1 billion. Late a lawsuit against Mylan for not informing investors about the probe from the Department of should Mylan have disclosed the EpiPen-related lawsuits in its 2017 annual report? Basic Versus Diluted Earnings per Share. In its 2019 annual report, Apple, Inc., reported that earnings per share were $11.97 per share while its diluted earnings per share were $11.89 per share. Die the factors that might cause the number of shares used in the calculation of earnings per share to increas and thus, cause diluted earnings per share (EPS) to be less than basic earnings per share. Which measure de you feel is more important to shareholders-basic EPS or diluted EPS? Why? Assessing the Quality of Reported Earnings Using Cash Flow Data. Below, you will find a graph of Enron's operating cash flows versus its net income in the years leading up to the company's downfall. You will notice that Enron's income differs quite a bit from its operating cash flows for every year in the chart What could account for the differences? Some users of financial statements use differences between net income and cash flows (particularly operating cash flows) as a rough indicator of how reliable net income is What is your opinion of the reliability of Enron's income based on the chart below? 0.3.4 Ero Corp .... 12/31/1990 1231/1998 12/31/1997 Net cash flows from operating activities financial statements as originally reported. The ratio of cash flow e bem of the table. Does it seem plausible that the company can have 12/31/1999 12/31/1998 12/31/1997 12/31/1998 5979 S893 1.228 1.38 $ 703 1,640 2.33 $ 105 211 2.01 $ 584 1,040 1.78 0:35 Lahare prices. It is common to see share prices of a company increase with then the company, such as positive earnings. However, stock prices do not cements. For example, in October of 2019, McDonald's Corporation's wwing its quarterly camnings announcement even though the company made $2.11 perre Denouncement may lead to a share price increase, but may also lead to a are presentenced by McDonald's direct method The solution QUESTIONS 03.1 Q.12 033 Building Shareholder Value. Describe at least three ways that corporate value increase their firm's share price). Rank-order the various managerial action to their effectiveness in building shareholder value. Be prepared to justify your ne Litigation Disclosure. Mylan NV, the maker of EpiPens (an allergy treatment), with in 2017 by the Department of Justice because they classified EpiPens as generie. By using sification, it was alleged that Mylan was able to overcharge Medicaid by over S1 billion. Late a lawsuit against Mylan for not informing investors about the probe from the Department of should Mylan have disclosed the EpiPen-related lawsuits in its 2017 annual report? Basic Versus Diluted Earnings per Share. In its 2019 annual report, Apple, Inc., reported that earnings per share were $11.97 per share while its diluted earnings per share were $11.89 per share. Die the factors that might cause the number of shares used in the calculation of earnings per share to increas and thus, cause diluted earnings per share (EPS) to be less than basic earnings per share. Which measure de you feel is more important to shareholders-basic EPS or diluted EPS? Why? Assessing the Quality of Reported Earnings Using Cash Flow Data. Below, you will find a graph of Enron's operating cash flows versus its net income in the years leading up to the company's downfall. You will notice that Enron's income differs quite a bit from its operating cash flows for every year in the chart What could account for the differences? Some users of financial statements use differences between net income and cash flows (particularly operating cash flows) as a rough indicator of how reliable net income is What is your opinion of the reliability of Enron's income based on the chart below? 0.3.4 Ero Corp .... 12/31/1990 1231/1998 12/31/1997 Net cash flows from operating activities financial statements as originally reported. The ratio of cash flow e bem of the table. Does it seem plausible that the company can have 12/31/1999 12/31/1998 12/31/1997 12/31/1998 5979 S893 1.228 1.38 $ 703 1,640 2.33 $ 105 211 2.01 $ 584 1,040 1.78 0:35 Lahare prices. It is common to see share prices of a company increase with then the company, such as positive earnings. However, stock prices do not cements. For example, in October of 2019, McDonald's Corporation's wwing its quarterly camnings announcement even though the company made $2.11 perre Denouncement may lead to a share price increase, but may also lead to a are presentenced by McDonald's