Zero Corp's Total Common Equity at the End of Last

question 64

Multiple Choice

Zero Corp's total common equity at the end of last year was $510,000 and its net income was $70,000.What was its ROE?

• A) 16.33%
• B) 13.73%
• C) 16.06%
• D) 11.39%
• E) 16.61%

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Definitions:

Face Value

The nominal value printed on a financial instrument like a bond or stock certificate, differing from its market value.

Strip Bond

A bond where both the principal and regular coupon payments have been separated and are sold individually as zero-coupon bonds.

Compounded Semiannually

Refers to the process where interest on a deposit or loan is calculated and added to the account balance twice a year.

Maturity Date

The date on which the principal amount of a loan, bond, or other financial instrument is due to be paid in full.