Which One of the Following Correctly Expresses the Clean Surplus

question 16

Multiple Choice

Which one of the following correctly expresses the clean surplus relationship?

• A)The change in book value per share is equal to earnings per share minus dividends per share.
• B)The change in retained earnings is equal to net income.
• C)The change in market value per share is equal to the change in book value per share.
• D)The change in market value per share is equal to earnings per share minus dividends per share.
• E)The rate of change in book value per share is equal to the firm's discount rate.

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Definitions:

Accounting Information

Data related to the financial transactions and status of an individual or entity, used for decision-making and reporting purposes.

Government Entities

Government entities are organizations or bodies that are part of the public sector, operated by the government at the federal, state, or local level.

Managers

Individuals responsible for directing and overseeing the operations and activities within a part or all of an organization, making key decisions to achieve goals.

Assets Used

Refers to the assets that are employed or utilized in the operation of a business to generate revenue.