The Relationship of $325,000 to $125,000, Expressed as a Ratio

question 195

Multiple Choice

The relationship of $325,000 to $125,000, expressed as a ratio, is

• A) 2.0
• B) 2.6
• C) 2.5
• D) 0.45

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Definitions:

Firm's Earnings

The net profit a company achieves in a given period, calculated as revenues minus costs and expenses before taxation.

Information Content Effect

A market phenomenon where stock prices adjust in response to the news contained in a company announcement, suggesting the news has value for investors’ decisions.

Dividend Payout

The segment of a company's income that is given to shareholders in dividends.

Residual Dividend

A policy whereby a company pays dividends to its shareholders from the residual or leftover equity once all operational and capital expenditure needs are met.