Which of the following considerations is most important for a stockholder when evaluating whether to purchase stock in a company?
A)Will earnings per share be distributed to stockholders?
B)Will the company earn a fair return on the amount invested by the stockholders?
C)Will the key ratios be reported on the balance sheet?
D)Will cash flows from operations exceed the amount of net income for the period?

Question

Quizplus · Accepted Answer

The most important consideration for a stockholder when evaluating whether to purchase stock in a company is whether the company will earn a fair return on the amount invested by the stockholders. This is because stockholders are investing their money in the company with the expectation of earning a return on their investment. While the other considerations listed may also be important, they are not as critical as the company's ability to generate profits for its shareholders.

Which of the Following Considerations Is Most Important for a Stockholder