Earnings per share of common stock measures the market value of one share of common stock.

Question

Quizplus · Accepted Answer

Earnings per share of common stock measures the profitability of a company as it is calculated by dividing the total earnings by the number of shares outstanding. It is not a measure of market value. Market value is measured by the stock price, which can be influenced by various factors such as company performance, market conditions, and investor sentiment.

Earnings Per Share of Common Stock Measures the Market Value