The numerator of the return on common stockholders' equity is

A) net income
B) net income minus preferred dividends
C) income before income tax
D) operating income minus interest expense

Question

The numerator of the return on common stockholders' equity isA)  net incomeB)  net income minus preferred dividendsC)  income before income taxD)  operating income minus interest expense

Andrew Sauls · Accepted Answer

Final Answer : B, Explanation :  The numerator of the return on common stockholders' equity is net income minus preferred dividends. This calculation ensures that the return measures the income available to common shareholders after preferred dividends have been paid out.

The numerator of the return on common stockholders' equity is

A) net income
B) net income minus preferred dividends
C) income before income tax
D) operating income minus interest expense

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