________ measures the return earned on the common stockholders' investment in the firm.
A) Net profit margin
B) Price/earnings ratio
C) Return on equity
D) Return on total assets

Question

Quizplus · Accepted Answer

Return on equity (ROE) is the measure of the return earned on the common stockholders' investment in the firm. It shows how much the shareholders are earning on their investment in the company. ROE is calculated by dividing the net income by the shareholders' equity.

________ Measures the Return Earned on the Common Stockholders' Investment