Reference no: EM132972545

The Reynante Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year.

                                           End of last year                   End of this year

Sales Php 610,000

Cost of sales Php 362,500

Gross income Php 247,500

Operating expenses Php 140,000

Interest expense Php 21,000

Net Income Php 86,500

Current assets                 Php 56,500                  Php 41,000

Non-current assets           Php 256,000                 Php 220,000

Total assets                    Php 312,500               Php 261,000

Current liabilities                  Php 28,500              Php 26,000

Long-term liabilities             Php 137,500            Php 122,500

Ordinary shareholders' equity Php 146,500                Php 112,500

Total liabilities and shareholders' equity Php 312,500   Php 261,000

• Average inventory for the current year is Php 18,125.
• Average net accounts receivable for the current year is Php 22,500.
• There are 35,000 ordinary shares outstanding.
• Total dividends paid during the current year were Php 8,500.
• The market price per ordinary share is Php 10.

Problem 1: What is the rate of return on ordinary shareholder's equity for the current year?

Select one:

a. 2.43%

b. 41.69%

c. 37.49%

d. 66.79%