Return on Equity Is a Ratio That

Multiple Choice

Return on equity is a ratio that:

A) is calculated by dividing profit plus preferred dividends by average common shareholders' equity and shows the relationship between profit available for common shareholders and average common shareholders' equity.
B) shows the relationship between net earnings and average shareholders' equity.
C) cannot be calculated if the company has preferred shares in addition to common shares.
D) is calculated by dividing profit plus preferred dividends by average common shareholders' equity.