If Share Price Rises from $12 to $15 Per Share

question 34

Multiple Choice

If share price rises from $12 to $15 per share, and pays a dividend of $1 per share, what was the rate of return to shareholders?

• A) 26.67%
• B) -13.33%
• C) 33.33%
• D) 16.67%

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Definitions:

Allowance for Doubtful Accounts

A contra-asset account that reduces the total receivables on the balance sheet to reflect the amount expected to be uncollectible.

Adjusting Entry

An adjustment recorded in the bookkeeping records at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Bad Debt Expense

The estimated amount of credit sales that are not expected to be collected, recognized as an expense in the income statement.

Uncollectible Accounts

Accounts receivable that a company does not expect to collect and writes off as a bad debt expense.