单选题
A company being analyzed has net income of $ 97, liabilities of $ 600, preferred equity of $ 30, total shareholder equity of $ 700, interest expense of $ 48, and preferred dividends of $1.80. What is the return on common equity?
【正确答案】
B
【答案解析】
Although the finn earned $ 97 on its $ 700 of total shareholder equity, $ 30 of this was preferred equity. The dividends paid to the preferred shareholders do not belong to the common equity, so these must be deducted from income to common shareholders.