Pedro & Son's total common equity at the end of last year was $405,000

Question

Question

Pedro & Son's total common equity at the end of last year was $405,000 and its net income was $70,000. What was its ROE?

Answer 1

Answer #1

ROE is equal to=net income/equity

=(70000/405000)

which is equal to

=17.28%(Approx).

Answer 2

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​Pedro & Son's total common equity at the end of last year was $405,000