Rafters, Inc

Multiple Choice

Rafters, Inc. has year-end retained earnings of $250,000, 100,000 cumulative preferred shares each with a dividend of $.80 each and $1,000,000 common shares. If Rafters Inc. achieved a net income after tax of $330,000 for the period, what is the company's return on equity?

A) 20%
B) 22.8%
C) 25.5%
D) 27.5%
E) 30.1%