A firm with sales of $1,000,000, net profits after taxes of$30,000, total assets of $1,500,000, and common stockholders' inv

Question

3 years ago

7

estment of $750,000 has a return on equity of ________. A. 3 percent B. 15 percent C. 20 percent D. 4 percent

1 answer:

tigry1 [53] · Answer 1 · 2022-05-22T00:44:38+03:00

Answer:

The firm has a return on equity of D. 4 percent

Explanation:

Return on equity (ROE) helps an investor see how much after-tax profit a company gained for each dollar in equity, is calculated by formula:

Return on equity (ROE) = Net income/shareholder's equity

The firm has net profits after taxes of $30,000 and common stockholders' investment of $750,000 - shareholder's equity.

ROE = ($30,000/$750,000) x 100% = 4.00%

A firm with sales of​ $1,000,000, net profits after taxes of​$30,000, total assets of​ $1,500,000, and common​ stockholders' inv