What Is the Return on Equity If Sales Are $100,000,net

question 35

Multiple Choice

What is the return on equity if sales are $100,000,net income is $22,700,beginning Stockholders' Equity is $88,000,and ending common Stockholders' Equity is $84,000?

• A)22.7%
• B)25.8%
• C)27.0%
• D)26.4%

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Definitions:

Par Value

The nominal or face value of a bond, stock, or coupon as indicated on a certificate or bond itself, often used as a legal capital measurement.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits through dividends.

Cumulative Preferred Stock

Stock that entitles its holders to any undeclared dividends that have accumulated before common stockholders receive their dividends.

Cash Dividends

A disbursement of profits from a company to its owners or investors, usually as a profit-sharing mechanism.