The periodic payments of dividends are subtracted from return to stockholders to calculate ____________?
Correct answer: C. gain on capital
- A. gain on spot contract
- B. loss on spot contract
- C. gain on capital
- D. loss on capitalAccounting & Auditing
Explanation
Total stock return consists of dividend income plus capital gain, so subtracting dividends from the return leaves the gain on capital. The other choices do not represent this residual return measure.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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