Question

Zero Corp's total common equity at the end of last year was $350,000 and its net income was $70,000. What was its ROE

Answer 1

ROE = 20%

Step-by-step explanation:

Given:

Common equity = $350,000

Net income = $70,000

Find:

ROE

Computation:

ROE = [Net income/Common equity]100

ROE = [$70,000/$350,000]100

ROE = 20%