The return on ordinary share equity is calculated by dividing
A)net income less preference dividends by average ordinary shareholders' equity.
B)net income by average ordinary shareholders' equity.
C)net income less preference dividends by ending ordinary shareholders' equity.
D)net income by ending ordinary shareholders' equity.

Question

Quizplus · Accepted Answer

The return on ordinary share equity is calculated by dividing net income less preference dividends by average ordinary shareholders' equity, as it reflects the return attributable to ordinary shareholders over the period.

The Return on Ordinary Share Equity Is Calculated by Dividing