Which Profitability Ratio Requires the Use of Earnings Per Share

question 15

Multiple Choice

Which profitability ratio requires the use of earnings per share and the current market price?

• A)Return on common stockholders' equity
• B)Dividend payout ratio
• C)Dividend yield
• D)Price-earnings ratio

---

Definitions:

Franz Mesmer

An 18th-century German physician who proposed the theory of animal magnetism and is considered a pioneer in the study of hypnosis.

Hypnosis

A trance-like state of focused attention and heightened suggestibility, accompanied by deep relaxation and vivid imaginations, often used for therapeutic purposes.

Raven's Progressive Matrices

A nonverbal test of abstract reasoning and intelligence, comprised of visual puzzles that increase in complexity.

Language

A system of communication used by a particular community or country, composed of written, spoken, or signed words and the rules for combining them.