Return on Equity Is a Ratio That

question 49

Multiple Choice

Return on equity is a ratio that:

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

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Definitions:

Mutual Adjustment

A coordination mechanism where individuals or groups work together and adjust their work and actions in an informal and spontaneous manner.

Differentiated Departments

Departments within an organization that specialize in different functions or tasks to achieve greater efficiency and effectiveness.

Temporary Group

A group formed for a specific short-term project or objective, with a definitive endpoint after the completion of the task.

Coordination Problems

Challenges that arise in ensuring that the tasks and activities of different individuals or departments within an organization are aligned and effectively integrated.