Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Can you please answer part A of this question? Question 1 Partially correct Mark 2.67 out of 4.00 Flag question Edit question Computing Return on

Can you please answer part A of this question?

image text in transcribed

Question 1 Partially correct Mark 2.67 out of 4.00 Flag question Edit question Computing Return on Equity Starbucks reports net income for 2018 of $4,518.3 million. Its stockholders' equity is $5,450.1 million and $1,169.5 million for 2017 and 2018, respectively. a. Compute its return on equity for 2018. Round answer to one decimal place (ex: 0.2345 = 23.5%) 136.51 X % b. Starbucks repurchased over $7,208.7 million of its common stock in 2018. Did this repurchase increase or decrease Starbucks' ROE? ROE usually decreases since the repurchase of shares reduces the denominator (avg. stockholders' equity). ROE usually increases since the repurchase of shares reduces the denominator (avg. stockholders' equity). ROE usually increases since the repurchase of shares increases the denominator (avg. stockholders' equity). ROE usually decreases since the repurchase of shares increases the denominator (avg. stockholders' equity). c. If Starbucks had not repurchased common stock in 2018, what would ROE have been? Note: Round answer to one decimal place (example: 20.6%). 65.3 %

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions