In Its Most Basic Form,the Earnings Per Share Ratio Is

question 114

Multiple Choice

In its most basic form,the earnings per share ratio is calculated as:

• A)dividends paid on common stock divided by the average number of outstanding common shares.
• B)the difference between net income and preferred dividends divided by the average number of outstanding common shares.
• C)total dividends paid divided by the average number of total stock shares.
• D)net income divided by average stockholders' equity.

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Definitions:

Total Revenue

The total amount of money generated by a business from its sales of goods or services before any expenses are subtracted.

Total Cost

The complete amount of money spent on the production of goods or services, including all variable and fixed costs.

Break-even Point

The point at which total costs equal total revenue, with no profit or loss, indicating the minimum sales volume needed to cover all expenses.

Fixed Costs

Expenses that do not change with the level of production or business activity, such as rent, salaries, and insurance.