Which Profitability Ratio Requires the Use of Earnings Per Share

question 92

Multiple Choice

Which profitability ratio requires the use of earnings per share and the current market price?

• A)Return on common stockholders' equity
• B)Dividend payout ratio
• C)Dividend yield ratio
• D)Price/earnings ratio

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Definitions:

Boiling Point

The temperature at which a liquid changes to a gas at a given pressure, characteristic for each specific substance.

Hydrophobic

Characteristic of molecules that repel water or do not mix well with water, often due to nonpolar properties.

Alkanes

Hydrocarbons consisting solely of hydrogen and carbon atoms arranged in straight or branched chains without any double or triple bonds.

Cis/trans Designation

A way to distinguish isomers by the relative positioning of functional groups within a molecule; cis means on the same side and trans means on opposite sides.