When More Than One Payment Is Made on a Simple

question 7

Multiple Choice

When more than one payment is made on a simple interest loan,the method of computing interest is known as the:

• A)add-on interest method.
• B)average daily balance method.
• C)adjusted balance method.
• D)declining balance method.
• E)previous balance method.

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Definitions:

EPS

Earnings Per Share (EPS) is a financial ratio calculated by dividing the company's net profit by the number of its outstanding shares, indicating how much money a company makes for each share of its stock.

Myron Gordon

An economist best known for his work on dividend policy and stock valuation, including the Gordon Growth Model which relates a company's dividend policy to its stock valuation.

John Lintner

A prominent economist known for his work on dividend policies and the capital asset pricing model (CAPM).

Dividend Payout Ratio

The proportion of earnings paid out as dividends to shareholders, expressed as a percentage of the company’s total earnings.