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Which of the Following Ratios Might a Potential Investor Use

question 9

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Which of the following ratios might a potential investor use to determine if the return to shareholders is a large portion of the total return generated by a company?


Definitions:

IRA

Individual Retirement Account, a saving account with tax advantages that individuals can use to save and invest long-term.

Compounded Annually

The process of calculating interest on both the initial principal and the accumulated interest from previous periods once a year.

Retirement

The point in time when an individual chooses to leave the workforce permanently, often accompanied by receiving pension or retirement savings.

Annual Rate of Return

This is the percentage change in the value of an investment over a one-year period, taking into account both capital gains and income received.

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