The Return That Shareholders Require on Their Investment in the Firm

question 69

Multiple Choice

The return that shareholders require on their investment in the firm is called the:

• A) dividend yield.
• B) cost of equity.
• C) capital gains yield.
• D) cost of capital.
• E) income return.

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Definitions:

GAAP

The standard set of guidelines for financial accounting that are widely accepted in a particular jurisdiction, known as Generally Accepted Accounting Principles.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board.

Debit And Credit Rules

The guidelines used in double-entry bookkeeping where for every debit entry, there must be a corresponding credit entry, and vice versa, to ensure the accounting equation is always balanced.

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to check the accuracy of financial records.