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

Question

Quizplus · Accepted Answer

Investors need to be aware that the value of a company's earnings per share can be affected by its choices of accounting principles and assumptions. Option A is incorrect as return on equity is a measure of profitability, not earnings. Option B is incorrect as earnings per share is calculated for a company's common stock. Option D is incorrect as book value per share measures the net worth of a company's equity, not the market value of its stock.

Which of the Following Statements Is Correct