The Return on Common Stockholders' Equity Is Computed by Dividing

question 102

Multiple Choice

The return on common stockholders' equity is computed by dividing net income

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

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Definitions:

Drawee

The party directed by a draft or check to pay a certain amount of money, typically a bank.

Payee

The individual or entity to whom money is paid or owes to be paid.

Negotiable Instrument

A negotiable instrument is a written document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the characteristic of being transferable by endorsement or delivery.

Validity

Validity refers to the state of being legally sound, effective, or binding; it is the quality of conforming to law or fact.