What is Katz's return on equity (ROE) if they report a net income of $48,325 and total equity of $396,550?

To calculate Katz's return on equity (ROE), you can use the formula:

[ \text{ROE} = \frac{\text{Net Income}}{\text{Total Equity}} \times 100]

Given the net income of $48,325 and total equity of $396,550, you would perform the following calculation:

1. Divide the net income by total equity:

[ \frac{48,325}{396,550} \approx 0.1219 ]

2. Multiply by 100 to convert it to a percentage:

[ 0.1219 \times 100 \approx 12.19% ]

This indicates that for every dollar of equity, Katz generates approximately 12.19 cents in profit, highlighting the efficiency with which the company is using its equity base to generate profits. This level of ROE can be considered quite strong, as it shows that Katz is effectively utilizing shareholder equity to produce net income. Thus, the calculation confirms that the selected answer is accurate.