Shareholders of a Publicly Traded Company Want to Assess the Return

question 23

Multiple Choice

Shareholders of a publicly traded company want to assess the return on their investment. The shareholders should use the following ratio to help specifically assess this:

• A) Gross profit margin.
• B) ROE.
• C) ROA.
• D) Profit margin.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security representing an ownership share in a corporation.

Dividends

A portion of a company's earnings distributed to shareholders as a reward for their investment.

Par Common Stock

The face value of common shares issued by a company, which is noted on the share certificate.

No-Par Common Stock

Shares of common stock issued without a par value, which means they are not assigned a nominal face value.