Which of the Following Best Defines the Term Return on Equity

question 20

Multiple Choice

Which of the following best defines the term return on equity (ROE) ?

• A) The weighted average of the costs of debt and equity.
• B) Net income after interest and taxes divided by average common shareholders' equity.
• C) Use of a WACC that is unique to a particular project.
• D) Performance measure based on WACC.
• E) Base case net present value of a project's operating cash flows plus present value of any financing benefits.

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Definitions:

Fluid Intelligence

The ability to reason and solve new problems independently of previously acquired knowledge.

Intelligence Gene

A hypothetical gene proposed to have a significant impact on an individual's intelligence, although intelligence is influenced by many genetic and environmental factors.

Prenatal Factors

Aspects that influence an individual's development before birth, including maternal health, nutrition, and exposure to toxins.

Postnatal Factors

Influences or events that affect an individual after birth.