Which One of the Following Is a Correct Equation to Calculate

question 26

Multiple Choice

Which one of the following is a correct equation to calculate earnings per share?

• A) (ROA) × (book value per share)
• B) (profit margin) × (total asset turnover) × (equity multiplier) × (book value per share)
• C) (profit margin) × (equity multiplier) × (book value per share)
• D) (profit margin) × (book value per share)

---

Definitions:

Cash Inflows

Money received by a business from its operational, financing, or investment activities.

Investment Projects

Initiatives undertaken by a business or organization to invest in new assets, technology, or resources with the expectation of generating future benefits.

Total-Cost Approach

A pricing strategy that considers all costs associated with producing and delivering a product or service to determine its selling price.

Discount Rate

The interest rate used to discount future cash flows to present value.