Pension intensity can be measured by expressing the pension plan assets and the pension obligation separately as:
A) a percentage of company's total liabilities.
B) a percentage of company's total assets.
C) a percentage of company's net income.
D) a percentage of company's shareholders' equity.

Question

Quizplus · Accepted Answer

Pension intensity is typically measured by expressing the pension obligation and plan assets as a percentage of the company's total assets. This provides an indication of the financial impact that the pension plan could have on the company's overall financial position. Expressing the pension plan assets and obligation as a percentage of total liabilities, net income or shareholders' equity does not provide as meaningful of a measure of the impact of the pension plan on the company.

Pension Intensity Can Be Measured by Expressing the Pension Plan