Which of the following statements is correct?
A) Investors need to understand that the value of a company's earnings per share is affected by its choices of accounting principles and assumptions.
B) Earnings per share is calculated for a company's preferred stock.
C) The most widely quoted measure of a company's earnings performance is return on equity.
D) The book value per share measures the market value of a corporation's stock.

Question

Quizplus · Accepted Answer

The statement correctly highlights the impact of accounting principles and assumptions on earnings per share.

Answer: B 
 The statement is incorrect as earnings per share is calculated for a company's common stock and not preferred stock.

Answer: C 
 While return on equity is a widely used measure of a company's profitability, it is not the most commonly used measure of earnings performance.

Answer: D 
 The statement is incorrect as book value per share measures the net assets of the company per share and not the market value of the stock.

Which of the Following Statements Is Correct