Question

Baldwin has a ROE of 0.28 (ROE = Net income/equity). That means: Select: 1 a) Baldwin earns $0.28 for each dollar invested by shareholders. b) Baldwin earns $0.28 per share for common stock held by shareholders. c) Baldwin earns $0.72 for each dollar invested by shareholders. d) Baldwin earns $0.72 per share for common stock held by shareholders.

Answer 1

correct option is a) Baldwin earns $0.28 for each dollar invested by shareholder

Step-by-step explanation:

given data

ROE = Net income / equity

ROE = 0.28

to find out

what is mean of ROE

solution

as we have given ROE = 0.28

so here ROE is show that profitability of any company

like as that how many dollars of profit a company generates with each dollar of equity shareholders

so here correct option is a) Baldwin earns $0.28 for each dollar invested by shareholder