Join thousands of students who trust us to help them ace their exams!Watch the first video
Multiple Choice
In the context of financial accounting, what does a stock quote represent?
A
The book value of a company's equity.
B
The current market price at which a share of stock can be bought or sold.
C
The total number of shares issued by a company.
D
The amount of dividends paid per share during the year.
Verified step by step guidance
1
Understand the concept of a stock quote: A stock quote represents the current market price at which a share of stock can be bought or sold. It reflects the real-time valuation of a company's stock in the marketplace.
Differentiate between the options provided: Analyze each option to determine its relevance to the definition of a stock quote.
Option 1: 'The book value of a company's equity' refers to the accounting value of a company's equity, calculated as total assets minus total liabilities. This is not the same as a stock quote, which is based on market valuation.
Option 3: 'The total number of shares issued by a company' refers to the quantity of shares a company has issued, not the price at which they are traded. This is unrelated to a stock quote.
Option 4: 'The amount of dividends paid per share during the year' refers to the distribution of profits to shareholders, not the market price of the stock. Therefore, the correct answer is the second option, which defines a stock quote accurately.