Question: Give the formula for computing (a) Rate of return on total assets (ROA) (b) Rate of return on common stockholders equity (ROE). Then answer these

Give the formula for computing
(a) Rate of return on total assets (ROA)
(b) Rate of return on common stockholders equity (ROE).
Then answer these questions about the rate-of-return computations.
1. Why is interest expense added to net income in the computation of ROA?
2. Why are preferred dividends subtracted from net income to compute ROE?

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