AkashM
Damn! It took me 10 mins to understand what you and Ajitesh are trying to say.
Appreciate the help! Thanks and kudos to both of you.
Looking at my post now, I can only imagine that I was in a bit of a hurry when I wrote it.

Here is a slightly better response for anyone else who wants to evaluate this question:
i. Impact as a noun:
1. ~the action of hitting or colliding
A sufficiently strong impact could deflect an asteroid. ← "A strong
collision could deflect an asteroid"
This is absolutely fine.
2. ~an effect
The are studying the impact of buybacks on stock prices. ← "... studying the
effect of buybacks..."
The impact on EPS is likely to be significant. ← "The
effect on EPS is likely to be significant"
This is absolutely fine.
ii. Impact as a verb form:
3. ~hit
The DART spacecraft will impact a small moonlet. ← "DART will
hit a small moonlet"
This is absolutely fine.
4. ~affect
Stock buybacks impact earnings per share. ← "Buybacks affect EPS"
Some people would not use
impact as a verb to mean
affect.
iii. Impact on as verb5. ~affect
Stock buybacks impact on earnings per share. ← "Buybacks affect EPS"
Many people would be uncomfortable using
impact on as a verb to mean
affect.
I would not expect to see (iii) (
impact on as a verb) in the correct option (
similar, official question), but option C uses
impact as a verb to mean
affect. Although some people would object to this, it is widely accepted. For this reason, I wouldn't advise a test taker to worry too much about this question.
To summarize: (a) this may not be a good question, and (b) you should be suspicious only of (iii) (
impact on as a verb).