Can somebody please explain to me how they are calculating the RoE in question 1 a) on page 204 of the CFA text? they are asking for RoE. fine. so they show $3537 as NI, then they show in an asterisk that beginning shareholders’ equity is 8432. easy enough; 3537/8432 = 41.94%. They give RoE as 46.26%, and I have no idea how the hell they are coming to that number, and I’ve been looking at it, reverse engineering, and doing all kinds of crap to it for 30 minutes, and I just can’t figure it out. HELP!!!
Shareholder’s equity has to be average of periods. (8432+6859)/2
thanks CP, got it now