The company's return on equity for Year 2 is closest to:

A) 3.31%
B) 8.50%
C) 5.09%
D) 50.52%

Question

The company's return on equity for Year 2 is closest to:A) 3.31%B) 8.50%C) 5.09%D) 50.52%

Heena Dania · Accepted Answer

Final Answer : A, Explanation :  Return on equity = Net income ÷ Average stockholders' equity*= $18,400 ÷ $556,500 = 3.31% (rounded)*Average stockholders' equity = ($563,000 + $550,000)÷ 2 = $556,500

The company's return on equity for Year 2 is closest to:

A) 3.31%
B) 8.50%
C) 5.09%
D) 50.52%

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