ExpertEasy1 markMultiple Choice
CPA · Question 35 · Area 2: Financial Statement Analysis
Which of the following is a 'Market Value' ratio?
Which of the following is a 'Market Value' ratio?
Answer options:
A.
Return on Assets
B.
Inventory Turnover
C.
Times Interest Earned
D.
Dividend Yield
How to approach this question
Look for the ratio that requires the stock price (Market Price).
Full Answer
D.Dividend Yield✓ Correct
Market value ratios relate the firm's stock price to its earnings or book value. Dividend Yield uses the market price in the denominator.
Common mistakes
Confusing profitability ratios with market ratios.
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