MK Company's return on common shareholders' equity for the current year was closest to:
A) 8.2%.
B) 10.2%.
C) 10.9%.
D) 13.6%.

Question

Quizplus · Accepted Answer

Without any additional information, we cannot calculate the exact return on common shareholders' equity for MK Company. However, we can use the answer choices to estimate a range of possibilities and choose the closest option. 
A return on common shareholders' equity of 8.2% is relatively low and may be indicative of lower profitability or higher levels of shareholder equity relative to net income. 
A return on common shareholders' equity of 13.6% is relatively high and may be indicative of higher profitability or lower levels of shareholder equity relative to net income. 
A return on common shareholders' equity of 10.2% falls in between these ranges. 
The closest answer choice is C) 10.9%, which is only slightly higher than 10.2% and may approximate a more accurate estimate of MK Company's return on common shareholders' equity for the current year.

MK Company's Return on Common Shareholders' Equity for the Current