Vidyalelo
Commerce · Q288

Financial Management

Graduate and Post Graduate · Commerce · question 288

Q288

A formula such as net income available to common stockholders divided by common equity is used to calculate

A.
return on earning power
B.
return on investment
C.
return on common equity
Answer
D.
return on interest

Answer: Option C

Solution

Answer: Option C
Solution:
A formula such as net income available to common stockholders divided by common equity is used to calculate return on common equity. The Return on Common Equity (ROCE) ratio refers to the return that common equity investors receive on their investment.