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Compute return on equity using market value of equity

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Reference no: EM132569893

NJ Simpson Inc. reported the following equity accounts in its 2017 balance sheet. Stock prices for the past three year-ends of 2017, 2016, and 2015 are: $244.80, $196.96, and $136.34, respectively.

The income statement for NJ Simpson Inc. reports the following.

$ millions                                                                       2017                      2016                     2015

Earnings attributable to company shareholders           $405                    $301                 $217

Consolidated net income                                        $409                     $303               $218

Question 1: Compute return on equity for 2017 and 2016, using market value of equity instead of book value.

Reference no: EM132569893

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