Chapter 11, Problem 11.4BDIE

(a)

To determine

Return on common stockholders’ equity ratio: It is a profitability ratio that measures the profit generating ability of the company from the invested money of the shareholders. The formula to calculate the return on common stockholders’ equity is as follows:

 $\begin{array}{l}\text{Return on common}\\ \text{ stockholder's equity}\end{array}\}=\frac{\text{Net income- Preferred Dividends}}{\text{Average common stockholder's equity}}\times \text{ 100}$

To Compute: the return on common stockholders’ equity for the Corporation V for the year 2017.

To determine

To Compute: the return on common stockholders’ equity for the Corporation V for the year 2016.

(b)

To determine

To discuss: the changes in return on stockholder’s equity in each year.