The Return on Common Shareholders' Equity Is Calculated by Dividing

question 48

Multiple Choice

The return on common shareholders' equity is calculated by dividing net income

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

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Definitions:

Licensing

A business arrangement in which one party allows another to use its trademark, patent, or technology in exchange for a fee or royalty.

Franchising

A method of doing business wherein a franchisor licenses trademarks and proven methods of doing business to a franchisee in exchange for a recurring payment, and usually a percentage of gross sales or gross profits as well as the annual fees.

Indirect Exporting

The process of selling products to a foreign market through an intermediary, such as an export trading company or an export management company, rather than directly to the consumer or retailer.

Direct Exporting

A method of entering a foreign market by selling goods directly to customers in another country, bypassing any intermediaries.