The Structure of the U

question 218

Multiple Choice

The structure of the U.S.federal income tax system reflects the _____ principle.

• A)efficiency
• B)ability-to-pay
• C)benefits
• D)lump-sum

---

Definitions:

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings, used to evaluate if a stock is over or under-valued.

Earnings Per Share

The amount of earnings a company makes, divided by its outstanding common shares, which reveals the firm's level of profitability.

Return on Assets

A financial ratio indicating the profitability of a company relative to its total assets, measuring how effectively a company uses its assets to generate earnings.

Debt-Equity Ratio

The indicator that quantifies how much of a company's assets are financed through equity and how much through debt.