Which of the following actions can potentially raise a company's stock price?

Improving operational efficiency to increase earnings is a powerful strategy for raising a company's stock price. When a company enhances its operational efficiency, it typically finds ways to reduce costs or increase productivity without sacrificing quality. This leads to higher profit margins and, consequently, increased earnings. Investors generally respond positively to such improvements, anticipating better financial performance, which can drive demand for the company's stock and potentially increase its price.

In contrast, increasing the number of shares outstanding, while a method to raise capital, can dilute existing shareholders' equity and may not have a positive impact on stock price. Similarly, announcing a merger that decreases earnings per share could give investors cause for concern, as lower earnings per share may signal reduced profitability. Reducing market share often indicates a decline in competitive position, which can negatively affect investor sentiment and further lead to a decrease in stock price. Thus, improving operational efficiency stands out as the most effective method among the options presented for enhancing a company's earnings and positively influencing its stock price.