Q287
Net income available to stockholders is Rs 150 and total assets are Rs 2,100 then return on total assets would be
A.
0.07%
B.
7.14%
AnswerC.
0.05 times
D.
7.15 times
Answer: Option B
Solution
Answer: Option B
Solution:
Net income available to stockholders = 150
Total assets = 2100
Return on common equity rate shows the net income earned per every rupee invested.It acts as a yardstick of profitability.
Return on common equity
= (net income - preferential stock)/Average common stock holder's equity
No further information is available
= (150/2100)×100
= 7.14%