Acompany's ne anter tax was Rs.400,000 for its most recent year. The company's income statement included Income Tax Expense of Rs.140,000 and Interest Expense of Rs 60,000. At the beginning of the year the company's stockholders' equity was Rs.1,900,000 and at the end of the year it was Rs.2,100,000. What is the after-tax retum on stockholder's equity for the year?
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The correct option is C)10
Earning before Interest & Taxes =400,000+160,000+40,000
=600,000
Times Interest earned = 60,000/600,000=10 times
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