A Firm Had Earnings Per Share of $3

question 8

Multiple Choice

A firm had earnings per share of $3.25 for the year.The book value per share at the beginning of the year was $13.What was the firm's return on equity for the year?

• A)25%
• B)20%
• C)42.25%
• D)75%
• E)40%

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Definitions:

Cost Curve

A graphical representation that shows the costs of production as a function of the total quantity produced.

Average Total Cost

The total cost of production divided by the number of goods produced; it's a method to calculate the cost per unit of production.

Average Variable Cost

The total variable costs (costs that change with production volume) divided by the quantity of output produced.

Diminishing Marginal Returns

A principle in economics where each additional unit of input results in a smaller increase in output than the previous unit, at a certain point.