Return on Equity Is a Ratio That

question 129

Multiple Choice

Return on equity is a ratio that:

• A)shows the relationship between net income available for common stockholders and average common stockholders' equity.
• B)is calculated by dividing net income plus preferred dividends by average common stockholders' equity.
• C)cannot be calculated if the company has preferred stock in addition to common stock.
• D)incorporates both A and B.

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