The numerator of the rate earned on common stockholders' equity ratio is equal to
A) net income
B) net income minus preferred dividends
C) income plus interest expense
D) income minus interest expense

Question

Quizplus · Accepted Answer

The numerator of the rate earned on common stockholders' equity ratio is the net income available for common stockholders, which is calculated by subtracting any preferred dividends from the net income. Therefore option B, net income minus preferred dividends, is the correct choice.

The Numerator of the Rate Earned on Common Stockholders' Equity