Asked by Jackson Hooper on Apr 28, 2024
Verified
The company's return on equity for Year 2 is closest to:
A) 3.31%
B) 8.50%
C) 5.09%
D) 50.52%
Return On Equity
A measure of a corporation's profitability that reveals how much profit a company generates with the money shareholders have invested.
- Analyze the corporation's return on equity performance.
Verified Answer
HD
Heena DaniaMay 02, 2024
Final Answer :
A
Explanation :
Return on equity = Net income ÷ Average stockholders' equity*
= $18,400 ÷ $556,500 = 3.31% (rounded)
*Average stockholders' equity = ($563,000 + $550,000)÷ 2 = $556,500
= $18,400 ÷ $556,500 = 3.31% (rounded)
*Average stockholders' equity = ($563,000 + $550,000)÷ 2 = $556,500
Learning Objectives
- Analyze the corporation's return on equity performance.
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