A company has net income of $5.6 million.Shareholders' equity at the beginning of the year is $32.55 million and,at the end of the year,it is $38.15 million.The only change to shareholders' equity came from net income.The ROE ratio is approximately:
A)1.15
B)0.16
C)0.87
D)6.64

Question

Quizplus · Accepted Answer

Average shareholders' equity = (Beg Shareholders' equity + End Shareholders' equity)/2
($32,550,000 + $38,150,000)/2 = $35,350,000
$5,600,000/$35,350,000 = $0.16.

A Company Has Net Income of $5