Craston Company's Net Income Last Year Was $70,000

question 139

Multiple Choice

Craston Company's net income last year was $70,000. The company paid preferred dividends of $10,000 and its average common stockholders' equity was $480,000. The company's return on common stockholders' equity for the year was closest to:

• A) 12.5%
• B) 14.6%
• C) 16.7%
• D) 2.1%

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Definitions:

Central Bank

A national bank that provides financial and banking services for its country's government and commercial banking system and implements monetary policy.

Money Supply

The whole sum of economic financial assets at a specified time.

Money Supply Growth Rate

The rate at which the total amount of monetary assets available in an economy increases over a specific period.

Long-run Phillips Curve

A concept in economics indicating that in the long run, there's no trade-off between inflation and unemployment, showing a vertical line at the natural rate of unemployment.