Return on Equity Is a Ratio That

question 96

Multiple Choice

Return on equity is a ratio that:

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

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Definitions:

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