Which of the following statements is true?
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

EPS pertains to shares of common stock.Perhaps the most frequently quoted measure of earnings performance is earnings per share (EPS).Book value per share is another frequently quoted measure of a share of stock.It is calculated by dividing stockholders' equity less preferred rights by outstanding common shares.A company's accounting records reflect book values,not worth.As a result,the book value per share is not a measure of the market value of a corporation's stock.

Which of the Following Statements Is True