Shown below are selected data from the financial statements of Noble Computers.

Question

Shown below are selected data from the financial statements of Noble Computers. (Dollar amounts are in millions, except for the per share data.) Income statement data: Net sales $ 3,500 Cost of goods sold $ 1,890 Operating expenses $ 675 Net income $ 115 Balance sheet data: Average total equity $ 540 Average total assets $ 4,400 Noble reported earnings per share for the year of $6 and paid cash dividends of $2.00 per share. At year-end, the Wall Street Journal listed Noble's capital stock as trading at $81 per share. Noble's return on equity was: Select one: a. 10%. b. 13%. c. 21%. d. 1. 73.

Explanation / Answer

Computation of Return on Equity Net income $115.00 Average Total Equity $540.00 Return on Equity 21% ( Net Income / Average Total Equity)X100

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