The Numerator of the Return on Common Stockholders' Equity Is

question 161

Multiple Choice

The numerator of the return on common stockholders' equity is

• A) net income
• B) net income minus preferred dividends
• C) income before income tax
• D) operating income minus interest expense

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Definitions:

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used to assess the value of future cash flows in today's dollars.

Recognition

The formal acknowledgment in accounting of a transaction or event's impact on the financial statements.