The Numerator of the Return on Common Stockholders' Equity Is

question 329

Multiple Choice

The numerator of the return on common stockholders' equity is

• A) net income.
• B) net income less common and preferred dividends.
• C) net income less common dividends.
• D) net income less preferred dividends.

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Definitions:

Law of Agency

A legal principle governing the relationship between a principal and their agent, where the agent is authorized to act on behalf of the principal in contractual or business transactions.

Apparent Authority

A situation where a person appears to have the authority to act on behalf of an organization, leading others to reasonably believe they have such power.

Implied Authority

The power assumed by a person that is reasonably necessary to carry out his or her expressed powers.

Reasonable Opportunity

A circumstance or condition that allows for a fair and plausible chance to pursue an action, achieve a goal, or resolve a problem, based on logical or practical considerations.