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-Return on Common Equity for 2005 Is:
A)11

Question 7

Multiple Choice

 Operating assets 20052004 Short-term debt 10,500$10,000 Long-term debt 3,50001,000 Minority interest 5004,000 Common equity 5,5005,000 Operating income 1,350 Interest expense 350 Tax expense (40%) 400 Minority interest 50 Net income 550\begin{array} { l r r } \text { Operating assets } & \underline { 2005 } & \underline { 2004 } \\\text { Short-term debt } & 10,500 & \$ 10,000 \\\text { Long-term debt } & 3,5000 & 1,000 \\\text { Minority interest } & 500 & 4,000 \\\text { Common equity } & 5,500 & 5,000 \\& & \\\text { Operating income } & 1,350 & \\\text { Interest expense } & 350 & \\\text { Tax expense } ( 40 \% ) & 400 & \\\text { Minority interest } & 50 & \\\text { Net income } & 550 &\end{array}
-Return on common equity for 2005 is:


A) 11.42%.
B) 10.0%.
C) 11.0%.
D) 10.47%.

Correct Answer:

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