Return on equity

Return on equity is net income minus preferred dividends, divided by average common stockholders' equity. It is a measure of profitability; also called rate of return on common stockholders' equity.

Definitions

According to Managerial Accounting by Braun, Tietz (5th edition),

Return on equity. Net income minus preferred dividends, divided by average common stockholders' equity. It is a measure of profitability; also called rate of return on common stockholders' equity.