The asset and liabilities of a corporation are 100M and 20M, respectively. There are 10M shares outstanding whose market price is $10 per share. EPS for the year is $2. The book ROE for this corporation is ____ and the market ROE is ____.

The asset and liabilities of a corporation are 100M and 20M, respectively. There are 10M shares outstanding whose market price is $10 per share. EPS for the year is $2. The book ROE for this corporation is and the market ROE is .

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 21DQ

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Question

17. The asset and liabilities of a corporation are 100M and 20M, respectively. There are 10M shares outstanding whose market price is $10 per share. EPS for the year is $2. The book ROE for this corporation is ____ and the market ROE is ____.

A. 25% / 20%
B. 15% / 20%
C. 20% / 25%
D. 20% / 20%
E. 25% / 15%

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