A return on equity of 17% implies which of the following?
A)For every 17 cents invested, a return of $1.00 results
B)For every $1.00 invested, a return of 17 cents results
C)For every $1.17 invested, a return of 17 cents results
D)For every $10.00 invested, a return of $1.17 results
E)None of the above

Question

Quizplus · Accepted Answer

Return on equity is calculated as net income divided by shareholders' equity. Therefore, a return on equity of 17% means that for every $1.00 invested by shareholders, the company generates a net income of 17 cents.

A Return on Equity of 17% Implies Which of the Following