Which One of the Following Correctly Expresses the Clean Surplus

question 70

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.
• 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.
• E) The rate of change in book value per share is equal to the firm's discount rate.

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Definitions:

Arthritis

Arthritis is a term for conditions that cause inflammation and stiffness in the joints, leading to pain and mobility issues.

Synovial Membrane

A specialized connective tissue that lines the inner surface of capsules of synovial joints and tendon sheath, making synovial fluid to lubricate and reduce friction.

Articular Cartilage

A smooth, white tissue that covers the ends of bones where they come together to form joints, reducing friction and absorbing shock.

Fibrous Capsule

A dense tissue layer that surrounds certain organs, providing support and protection.