Common Stockholders' Profitability Analysis A company reports the following: Net income $1,000,000 Preferred dividends 50,000 Average stockholders' equity 6,250,000 Average common stockholders' equity 3,800,000 Determine (a) the return on stockholders’ equity and (b) the return on common stockholders’ equity. (Round percentages to one decimal place.) a. Return on stockholders’ equity % b. Return on common stockholders’ equity %
Common Stockholders' Profitability Analysis A company reports the following: Net income $1,000,000 Preferred dividends 50,000 Average stockholders' equity 6,250,000 Average common stockholders' equity 3,800,000 Determine (a) the return on stockholders’ equity and (b) the return on common stockholders’ equity. (Round percentages to one decimal place.) a. Return on stockholders’ equity % b. Return on common stockholders’ equity %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Common Stockholders' Profitability Analysis
A company reports the following:
| Net income | $1,000,000 |
| Preferred dividends | 50,000 |
| Average |
6,250,000 |
| Average common stockholders' equity | 3,800,000 |
Determine (a) the return on stockholders’ equity and (b) the return on common stockholders’ equity. (Round percentages to one decimal place.)
| a. Return on stockholders’ equity | % |
| b. Return on common stockholders’ equity | % |
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