I need answer of this question general accounting Farmer Company reports the following amounts for 2015:Net income$135,000Average stockholders' equity 500,000Preferred dividendsPar value preferred stock15,000100,000The 2015 rate of return on common stockholders' equity is:a) 30.0%.b) 24.0%.c) 27.0%.d) 33.8%.

Step 1: Define Return on EquityReturn on equity is a useful financial ratio for the promoters of a…

Answered: Farmer Company reports the following…

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.16E

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Farmer Company reports the following amounts for 2015: Net income $135,000 Average stockholders' equity 500,000 Preferred dividends Par value preferred stock 15,000 100,000 The 2015 rate of return on common stockholders' equity is: a) 30.0%. b) 24.0%. c) 27.0%. d) 33.8%.