Return on equity is equal to which one of the following?
A)dividend yield divided by total equity
B)retained earnings divided by total equity
C)revenue divided by total equity
D)net income divided by total equity
E)operating cash flow divided by total equity

Question

Quizplus · Accepted Answer

Return on equity (ROE) measures the amount of net income earned per dollar of shareholders' equity. Therefore, the correct formula to calculate ROE is net income divided by total equity. Option D is the only one that includes net income in the calculation.

Return on Equity Is Equal to Which One of the Following