Lisa Inc.'s return on common shareholders' equity for Year 2 was closest to which of the following?
A) 7.8%.
B) 10.6%.
C) 10.9%.
D) 12.4%.Return = (35 - 5)/282.5 = 10.6%.

Question

Quizplus · Accepted Answer

The calculation for Lisa Inc.'s return on common shareholders' equity is (Net Income - Preferred Dividends) / Average Common Shareholders' Equity. Using the financial information given in the question stem, the calculation is: (35 - 5) / 282.5 = 0.106 or 10.6%. Therefore, the closest answer choice is B, 10.6%.

Lisa Inc'S Return on Common Shareholders' Equity for Year 2 Was