All Else Equal, When a Company Uses Excess Cash to Buy

Multiple Choice

All else equal, when a company uses excess cash to buy back some of its outstanding common stock, which of the following ratios will be affected directly in the manner described below?

A) The return on equity (ROE) will decrease.
B) Earnings per share (EPS) will increase.
C) The inventory turnover ratio will increase.
D) The receivables turnover ratio will increase.