Return on equity is most accurately described as a measure of:
A) return on assets combined with liquidity.
B) is the amount of net income paid to retained earnings after allowing for dividends paid.
C) the return available to all stockholders in the company.
D) the return on capital based on common stockholder investment.

Question

Quizplus · Accepted Answer

Return on equity (ROE) measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. It is specifically focused on the return on the investment for common stockholders, making it a measure of the return based on the common stockholder's investment.

Return on Equity Is Most Accurately Described as a Measure