What is the accounting relationship in which earnings per share minus dividends per share equals the change in book value per share called?
A)clean surplus relationship
B)economic value added relationship
C)accounting earnings identity
D)payout-retention identity
E)dividend valuation equation

Question

Quizplus · Accepted Answer

The clean surplus relationship states that the change in equity from one period to another is equal to the net income for that period minus any dividends paid during that period. This relates directly to the given accounting relationship, where earnings per share (EPS) minus dividends per share is equal to the change in book value per share. Therefore, the correct answer is A, the clean surplus relationship.

What Is the Accounting Relationship in Which Earnings Per Share