A1. The ROE ratio measures:

Multiple Choice

• return shareholders receive in dividends for each dollar of their investment.

• amount earned by the company on each dollar contributed by shareholders and generated and reinvested by the company.

• return shareholders receive in dividends and stock price growth for each dollar of their investment.

• amount earned by the company on each dollar obtained from equity and debt financing.

A2. Under IFRS preferred shares are classified as a liability if:

Multiple Choice

• They are issued at a premium over the face value.

• They are not classified as a liability.

• The issuing company is contractually obligated to convert them into common shares.

• The issuing company is contractually obligated to pay dividends or redeem the shares at a future date.