All of the Following Profitability Ratios Relate More to the Needs

question 36

Multiple Choice

All of the following profitability ratios relate more to the needs of investors than corporations except for

• A)earnings per share.
• B)payout ratio.
• C)profit margin.
• D)dividend yield.

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Definitions:

Explicit Costs

These are the direct, out-of-pocket payments made by businesses for operational expenses like wages, rent, and materials.

Monetary Outlay

The amount of money spent on a particular transaction or investment.

Implicit Costs

The opportunity costs that arise when a company uses internal resources without a direct payment.

Explicit Costs

Direct payment made to others in the course of running a business, such as wages, rent, and materials.