The return on stockholders' equity is computed as:
A) income from operations divided by average operating assets.
B) net income divided by preferred dividends.
C) net income divided by average total stockholders' equity.
D) gross income divided by total retained earnings.

Question

Quizplus · Accepted Answer

The return on stockholders' equity is calculated by dividing the net income by the average total stockholders' equity. This ratio helps investors and analysts determine how effectively a company is using its equity to generate profits.

The Return on Stockholders' Equity Is Computed As