Question

Which of the following groups uses accounting information to determine whether the company's net income will result in a stock price increase?
A. Chief Financial Officer
B. Investors in common stock
C. Creditors
D. Marketing manager

Answer 1

Answer:

The correct answer is B. Investors in common stock.

Explanation:

The company net income or earning per share is an indicator of price rise or fall in stock market. The increase in net earning or eps results in increase in stock price and vice versa. The investor will get more return on its investment if eps rise as price of stock instrument will increase and more earning means more dividend. So Investors in common stock  uses accounting information to determine whether the company's net income will result in a stock price increase.