The income statement showed the following Net income $91,000 Shareholder's equity Beginning of year$787,500 End of year
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Question:
The income statement showed the following
Net income $91,000
Shareholder's equity
Beginning of year$787,500
End of year $829,500
What is the return of stockholder's equity?
a). 11.55%
b). 11.3%
c). 10.9%
d). 11.26% -answer
The answer to the question is 11.26%, however, I do not get that answer. If I use the formula below I get the following. Please explain.
Explanation: ROE + net earnings/total stockholders' equity x 100
91,000 / 787,500 * 100% = 11.55%
91,000 / 829.500 * 8 100% =10.97
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