Assume All Assets Are Operating Assets; All Current Liabilities Are

$$\begin{array} { l r r } & \underline { 2006 } & \underline { 2005 } \\\text { Current assets } & \$ 4,650 & \$ 4,730 \\\text { Long-term assets } & 7,120 & 6,450 \\\text { Current liabilities } & 1,440 & 1,340 \\\text { Long-term debt } & 3,830 & 3,760 \\\text { Common equity } & 6,500 & 6,080 \\& & \\\text { Operating income } & 2,140 & \\\text { Interest expense } & 240 & \\\text { Tax expense } ( 40 \% ) & 760 & \\\text { Net income } & 1,140 &\end{array}$$
Assume all assets are operating assets; all current liabilities are operating liabilities.
-Return on equity for 2006 is:

A) 20.41%.
B) 19.75%.
C) 17.54%.
D) 18.12%.

Correct Answer:

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