Which of the Following Describes the Return on Equity Ratio

Multiple Choice

Which of the following describes the return on equity ratio?

A) [Net income + interest expense × 1 - tax rate) ) ] ÷ average common shareholders' equity
B) [Net income - preferred shares] ÷ average common shareholders' equity
C) [Net income + preferred dividends] ÷ common shareholders' equity
D) [Net income - preferred dividends] ÷ average common shareholders' equity