The Return on Common Stock Equity Is Calculated by Dividing

question 62

Multiple Choice

The return on common stock equity is calculated by dividing

• A) net income by average common stockholders' equity.
• B) net income less preferred dividends by average common stockholders' equity.
• C) net income by ending common stockholders' equity.
• D) net income less preferred dividends by ending common stockholders' equity.

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account column totals that are equal.