Answered step by step
Verified Expert Solution
Link Copied!

Question

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 to Expert-Tailored 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

Recommended Textbook for

CIA Exam Practice Questions Certified Internal Auditor

Authors: The Internal Audit Foundation

1st Edition

163454045X, 978-1634540452

More Books

Students also viewed these Accounting questions