Which of the Following Statements About Shareholders' Equity Is NOT

question 22

Multiple Choice

Which of the following statements about shareholders' equity is NOT true?

• A) Shareholders' equity is the excess of assets over liabilities.
• B) Shareholders' equity consists of two main elements: share capital and retained profits.
• C) Shareholders' equity is a residual claim of the shareholders on the assets of the organisation.
• D) Shareholders' equity is the amount shareholders will receive in dividends in the future.

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Definitions:

NPV

Net Present Value; a financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows.

TSX

The Toronto Stock Exchange, which is the largest stock exchange in Canada where securities are bought and sold.

Standard Deviation

A metric that quantifies the extent of differences or variability among a group of figures.

Variance

A measure of dispersion that shows how much the data points in a set differ from the mean.