Indicate Whether Each of the Following Statements About Financial Statement

question 28

Short Answer

Indicate whether each of the following statements about financial statement analysis is true or false.
_____ a)Both dividends and earnings performance are indicators of the value of a company's stock.
_____ b)The most widely quoted measure of a company's earnings performance is earnings per share.
_____ c)Earnings per share is calculated for a company's preferred stock.
_____ d)Investors need to understand that the value of a company's earnings per share is affected by its choices of accounting principles and assumptions.
_____ e)The book value per share measures the market value of a corporation's stock.

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Definitions:

Coefficient

A numerical or constant quantity placed before and multiplying the variable in an algebraic expression, often indicating proportionality.

Normal Good

A good for which demand increases as consumer income rises, and decreases as consumer income falls.

Income Elasticity

A rephrased definition: The responsiveness of demand for an item to changes in the income of the people demanding the item.

Inferior Good

A good or service whose consumption declines as income rises, prices held constant.