Which of these ratios measure returns to shareholders?
A) earnings per share
B) return on shareholders' funds
C) dividend yield
D) all of the above

Question

Quizplus · Accepted Answer

All of the above ratios measure returns to shareholders.

- Earnings per share (EPS) is the amount of profit allocated to each outstanding share of common stock. It shows how much of a company's profit is generated per share of its stock, and thus it can indicate the profitability of the company to its shareholders.

- Return on shareholders' funds, also known as return on equity (ROE), is a measure of how much profit a company generates with the money shareholders have invested. It measures the return on the owners' investment in the business and shows how well the company is using its equity to generate profits.

- Dividend yield is the ratio of annual dividends per share to the current market price per share. It shows how much a company pays out in dividends relative to its stock price, and thus it can indicate the return on investment that shareholders receive through dividends.

Which of These Ratios Measure Returns to Shareholders