The Delicious Restaurant Corporation reported the following financials at the end of the current year:
Inventory and prepaid expenses account for $30,000 of the current year’s current assets. Average inventory for the current year is $36,250. Average net accounts receivable for the current year is $45,000. There are 35,000 shares of common stock outstanding. Total dividends paid during the current year were $17,000. The market price per share of common stock is $20.
What is the rate of return on common stockholders’ equity (ROE) for the current year?
e. None of the above
Using the basic formula for the return on equity, averaging total equity over the period,