The Return on Common Shareholders' Equity Ratio Is Affected by the

question 60

Multiple Choice

The return on common shareholders' equity ratio is affected by the

• A)gross profit margin and profit margin ratio.
• B)profit margin and free cash flow.
• C)times interest earned and debt to total assets ratios.
• D)return on assets and debt to total assets ratios.

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Definitions:

Effective Interest Method

A technique used for calculating the interest income of a debt investment over its expected life, adjusting for the impact of amortizing any discount or premium on the purchase price of the bond.

Journal Entry

A record of the financial transactions of a business, documented in the general ledger accounts.

Issuance

Issuance refers to the process of making securities available for sale by a corporation or government entity, typically in the context of raising capital.

Interest Payment

A payment made to lenders by borrowers, representing the interest accrued on the loan or debt for a specific period.