Which Profitability Ratio Requires the Use of Earnings Per Share

question 92

Multiple Choice

Which profitability ratio requires the use of earnings per share and the current market price?

• A)Return on common stockholders' equity
• B)Dividend payout ratio
• C)Dividend yield ratio
• D)Price/earnings ratio

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Definitions:

Population Variance

The average of the squared differences from the Mean, describing the variation of the entire population.

Normally Distributed

Describes a bell-shaped frequency distribution that is symmetrical about the mean, indicating that data near the mean are more frequent in occurrence than data far from the mean.

Sample Size

The number of observations or data points collected in a study or used to represent a larger population.

Confidence Interval

A range of values that is likely to contain a population parameter, estimated from a sample data with a given level of confidence.