The Return on Equity Ratio Measures

question 61

Multiple Choice

The Return on Equity ratio measures:

• A)the return stockholders receive in dividends for each dollar of their investment.
• B)the return stockholders receive in dividends and stock price growth for each dollar of their investment.
• C)the amount earned by the company on each dollar contributed by stockholders and earnings reinvested in the company.
• D)the amount earned by the company on each dollar obtained from equity and debt financing.

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Definitions:

Positive Output

A situation where the production of goods or services results in a quantity greater than zero.

Long-Run Cost Function

A representation of the total cost associated with producing a given level of output when all inputs, including capital, can be varied.

Positive Output

A situation in which an economic model or production process results in a positive amount of goods or services being produced.

Supply Function

A mathematical relationship that shows the quantity of a good or service that producers are willing and able to sell at different prices.