Zero Corp's total common equity at the end of last year was $405,000 and its net...

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Question

Answer 1

Answer #1

Information provided:

Common equity= $405,000

Net income= $70,000

The formula for return on equity (ROE) is:

Return on Equity= Net Income/Shareholder’s Equity

= $70,000/ $405,000

= 0.1728*100

= 17.28%.

Therefore, Zero Corp’s ROE is 17.28%.

Answer 2

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