Equity investors (i.e., shareholders) invest money in a business in order to earn a profit, or return,
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Equity investors (i.e., shareholders) invest money in a business in order to earn a profit, or return, on that equity. Thus, from the viewpoint of the shareholders, the best overall measure of the entity’s performance is the r ____ that was earned on the entity’s e ____ .
(This is abbreviated ROE. )
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