The Return on Common Stockholders' Equity Is Computed by Dividing

question 152

Multiple Choice

The return on common stockholders' equity is computed by dividing

• A) net income by ending common stockholders' equity.
• B) net income by average common stockholders' equity.
• C) net income less preferred dividends by ending common stockholders' equity.
• D) net income less preferred dividends by average common stockholders' equity.

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Definitions:

Satisficing

A decision-making strategy that aims for a satisfactory or adequate result, rather than the optimal one, due to constraints such as limited information or time.

Rationality

The quality of being based on or in accordance with reason or logic; decision-making that aims to optimize outcomes.

Creative Imagination

The capacity to generate innovative ideas, solutions, or artistic expressions.

Judgment

The ability to make considered decisions or come to sensible conclusions.