To Compute the Return on Common Equity Ratio, the Numerator

question 119

Short Answer

To compute the return on common equity ratio, the numerator includes ____________________ minus preferred dividends, and the denominator is the average common stockholders' equity.

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Definitions:

Marginal Costs

The additional cost incurred in producing one more unit of a product or service.

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not influence future business decisions.

Shut Down

The process of ceasing operations or activity, either temporarily or permanently.

Average Variable Costs

The per unit cost of production that varies with the level of output, including elements like labor and raw materials.