Factors That Usually Affect Retained Earnings Directly Include

question 18

Multiple Choice

Factors that usually affect retained earnings directly include:

• A) net income or loss, and dividends.
• B) restructuring charges and losses from discontinued operations.
• C) stock dividends and gains or losses from the sale of treasury stock.
• D)net income or loss, and the issuance of stock at an amount in excess of par value.

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Definitions:

Beta Coefficient

A gauge for assessing the risk or fluctuation level of a security or portfolio in relation to the entire market.

Risk-Free Rate

The theoretical rate of return on an investment with zero risk, typically represented by government bonds.

Market Risk Premium

The surplus earnings expected by investors for possessing a market portfolio with risks as opposed to secure, riskless assets.

CAPM

Capital Asset Pricing Model, a formula that describes the relationship between the expected return of an investment and its risk.