The Following Data Represent Selected Information from the Comparative Income

question 106

Multiple Choice

The following data represent selected information from the comparative income statement and balance sheet for Dunkin Company for the years ended December 31, 2011 and 2010: * 10,000 shares of common stock have been issued and outstanding since the company was established. They had a market value of $90 per share on December 31, 2010, and they were selling for $91.50 on December 31, 2011. The earnings per share for Dunkin Company for 2011, was:

• A)9.50.
• B)1.16.
• C)7.00.
• D).70.

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Definitions:

Comparison Universe

A set of similar investment options or benchmarks used for evaluating the performance or characteristics of a specific investment.

Jensen Measure

A performance evaluation method that measures the excess returns a portfolio generates over its expected return, given its level of market risk.

Absolute Measure

A term used in finance to describe a statistical measure that is not relative but quantifies an actual amount or change.

CAPM

The Capital Asset Pricing Model, a theory used in finance to determine a theoretically appropriate required rate of return of an asset, considering risk and the time value of money.