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Return on equity measures: Question 2 options: a) the rate of profit per dollar of shareholder...

Return on equity measures:

Question 2 options:

a)

the rate of profit per dollar of shareholder investment

b)

the rate of profit per dollar of total investment

c)

the amount of equity investment relative to total investment

d)

the average rate of interest earned on items that receive interest

e)

the average rate of interest paid on items that require interest payments
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Answer #1

Answer - Return on equity measures -

a)the rate of profit per dollar of shareholder investment

Return on equity gives shareholders an idea as to how the company in which they have invested is performing and managing the funds. Higher the Return on equity the better it is for the business and its stakeholders

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