Question #39
Reading: Reading 23 Residual Income Valuation
PDF File: Reading 23 Residual Income Valuation.pdf
Page: 22
Status: Unattempted
Correct Answer: A
Question
Residual income is defined as:
Answer Choices:
A. net income less a charge for capital investment
B. operating income plus depreciation and amortization
C. net income less a charge that measures stockholders' opportunity cost in generating that income
Explanation
Residual income is defined as net income less a charge that measures stockholders'
opportunity cost in generating that income.