Using DuPont Analysis, What Are the Components of Return on Stockholders

question 55

Multiple Choice

Using DuPont Analysis, what are the components of return on stockholders' equity?

• A)Return on Sales and Leverage Ratio
• B)Return on Sales, Debt Ratio and Asset Turnover Ratio
• C)Return on Assets and Debt Ratio
• D)Net Profit Margin Ratio, Asset Turnover Ratio, and Leverage Ratio

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Definitions:

Price Floor

A government-imposed minimum price below which a certain good or service cannot be sold, often set to protect producers or sectors.

Lobby

The act of attempting to influence the decisions of government officials, typically by special interest groups.

Binding Price Ceiling

A maximum price set by the government below the equilibrium price, preventing suppliers from raising the price above it, leading to shortages.

Surplus

The situation in which the quantity of a good supplied exceeds the quantity demanded, often resulting in downward pressure on prices.