Net income for Kirby Corporation for 2017 was $60,000.Common shareholders' equity was $250,000 and $275,000,on January 1,2017,and December 31,2017,respectively.What was the return on common shareholders' equity for Kirby Corporation for 2017?
A) 0.22
B) 0.24
C) 0.23
D) 1.00

Question

Quizplus · Accepted Answer

The return on common shareholders' equity is calculated as Net Income divided by Average Common Shareholders' Equity. Average Common Shareholders' Equity = ($250,000 + $275,000) / 2 = $262,500. Return on Common Shareholders' Equity = $60,000 / $262,500 = 0.22857, which rounds to 0.23.

Net Income for Kirby Corporation for 2017 Was $60,000