Perot Company had profit before interest and taxes of $120,000.Interest expense for the period was $17,000 and income taxes amounted to $28,500.The average shareholders' equity was $680,000.What is Perot's return on equity?
A)10.96%
B)13.46%
C)15.15%
D)17.65%

Question

Quizplus · Accepted Answer

Return on equity = (Profit before interest and taxes - Interest expense) / Average shareholders' equity * 100= ($120,000 - $17,000) / $680,000 * 100= $103,000 / $680,000 * 100= 15.15%

Perot Company Had Profit Before Interest and Taxes of $120,000