Which One of These Statements Is Correct

question 21

Multiple Choice

Which one of these statements is correct?

• A)Pretax income is equal to net income minus taxes.
• B)The addition to retained earnings is equal to net income plus dividends.
• C)Operating income is equal to operating revenue minus cost of goods sold.
• D)Only current taxes are included in the tax expense.
• E)Earnings per share can be negative but dividends per share cannot.

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Definitions:

Regression Equation

A mathematical formula used to predict the value of a dependent variable based on the values of one or more independent variables.

Beta

A measure of a stock's volatility in relation to the overall market; a beta greater than 1 indicates the stock is more volatile than the market, while a beta less than 1 indicates less volatility.

Adjustment Technique

A method used in different contexts to correct or modify processes, values, or systems for a specific purpose, often for accuracy or improvement.

Regression Parameters

The coefficients in a regression equation that represent the relationship between the independent variables and the dependent variable.