Which Ratio Is a Measure of the Profit Available to Common

question 1

Multiple Choice

Which ratio is a measure of the profit available to common shareholders on each share of common stock outstanding?

• A)Price-earnings ratio
• B)Earnings per share
• C)Return on total assets
• D)Return on common stockholders' equity

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Definitions:

Cognitive Dissonance

A psychological phenomenon where an individual experiences discomfort from holding two or more conflicting beliefs, ideas, or values.

Fundamental Attribution Error

The tendency to overemphasize personal characteristics and ignore situational factors when judging others' behavior.

Insufficient Justification Effect

A phenomenon in psychology where individuals change their attitudes or beliefs due to the realization that their actions cannot be justified by the external rewards or punishments alone.

Cognitive Dissonance Theory

A theory which suggests that we experience discomfort or dissonance when our beliefs, values, or behaviors are in conflict, leading us to change one to reduce the dissonance.