A company had $2 million in net income before dividends. It had $300,000 in preferred stock dividends and $500,000 in common stock dividends. The company has $1,500,000 in shareholder equity. What is the company's return on equity?

1.53

1.13

1.33

0.80

Which of the following is NOT a limitation of using ratio analysis to evaluate a company?

Ratio analysis is dependent on financial statements which may not be accurate.

Ratio analysis presents a complex view of the company, as the ratios can be hard to interpret.

Ratio analysis does not consider a number of important aspects of a firm's success.

Stockholder sentiment may be a bigger driver of stock price than a company's financial fundamentals.