### CFA Practice Question

There are 534 practice questions for this study session.

### CFA Practice Question

An analyst has extracted the following information from the financial statements of Myco:

What is the return on equity for Myco?
A. 14.85%
B. 22.85%
C. 9.65%
Explanation: ROE = Net income / Equity = [0.65 x 1,298] / [3,086 + 5,653] = 0.0965, or 9.65%

### User Contributed Comments9

User Comment
Kuki dont think too much..the answer might be simpler than you think. I broke my head trying to figure out the answer using DUPONT analysis.
felixd so did I. I think this is very good advice for the entire CFA exam. When several solutions are possible it is most likely the simlest one
ml42085 occam's razor
mattg Good advice, I'll try to keep it in mind :)
gill15 Why is Div paid not apart of Calc. If:
OE = contributed capital + End Retained earnings
OE = 3086 + Beg Retained Earnings(5653) - DIV(274)
OE = 8465 should be used.

Or is the 5653 given End retained earnings? How would you know if its beg or end. Confused.
oregan Dividends paid are already included in the net income, gill15.
clipp ^^^ incorrect, dividends are paid out of retained earnings and are after tax distributions.
davcer Before aplying the dupont method be sure that NI and Equity are missing, otherwise you will do unnecessary calculations
cfastudypl Attempting to use the Dupont analysis or model when all the data for a direct NI/Equity calculation are given is time killing. Kuki's thought above is quite instructive.