Which statements is least likely true regarding dividends

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Problem 1: A firm is expected to generate P1.5 million in operating income and pay P250,000 in interest. Ignoring taxes, this will generate 12.50 earnings per share. What will happen to EPS if operating income increases to P2.0 million?

a. EPS increases to P17.50

b. EPS increases to P15.63

c. EPS increases to P20.00

d. EPS increases to P16.67

Problem 2: Which of the following statements is least likely true regarding dividends?

a. Preferred stocks are guaranteed with dividend

b. Common stocks are entitled with dividends

c. Common stocks are guaranteed with dividend

d. Preferred stocks prioritized before the common stocks with regards to dividends

Reference no: EM132809377

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