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When a company has both common and preferred stock, its ROE must be adjusted by ______. (Select all that apply.) Multiple select question. adding the preferred stock balance to total stockholders' equity subtracting preferred stock dividends from net income subtracting the preferred stock balance from total stockholders' equity adding the preferred stock dividends to net income

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Anthougoidn

With both common and preferred stocks, the company's ROE must be adjusted by B. subtracting preferred stock dividends from net income and C. subtracting the preferred stock balance from total stockholders' equity.

ROE means Return on Equity.  It refers to the financial measure that determines the profitability of Common Stockholders' investments versus the profits due to them.

Thus, to arrive at the ROE, the preferred stock dividends must be deducted from the net income, and the resulting figure is divided by the balance of the total stockholder's equity after subtracting the preferred stock.

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