Return on Common
Return on common Stockholder’s equity is rate at which the common Stockholder’s equity amount earns income for the corporation. The same is computed by dividing the total earnings available f or common stockholders by Average amount of common stockholder’s equity, expressed in percentage.
The net income for common stockholders is computed by deducting the preferred dividend commitment as well. The Average amount of Common Stockholder’s equity shall be computed on the basis of beginning balance of common Stockholder’s equity and Ending balance of common stockholder’s equity.
The
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