The numerator of the return on common stockholders' equity is
A) net income
B) net income minus preferred dividends
C) income before income tax
D) operating income minus interest expense

Question

Quizplus · Accepted Answer

The numerator of the return on common stockholders' equity is net income minus preferred dividends. This calculation ensures that the return measures the income available to common shareholders after preferred dividends have been paid out.

The Numerator of the Return on Common Stockholders' Equity Is