Common Stockholders' Profitability Analysis A company reports the following: Net income $125,000 Preferred dividends 5,000 Average stockholders' equity 976,563 Average common stockholders' equity 588,235
Common Stockholders' Profitability Analysis A company reports the following: Net income $125,000 Preferred dividends 5,000 Average stockholders' equity 976,563 Average common stockholders' equity 588,235
Chapter5: Operating Activities: Purchases And Cash Payments
Section: Chapter Questions
Problem 2.1C
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Transcribed Image Text:DZL. 7-2 Project: Company Accour X
D21. 7-1 Problem Set: Module Sev X
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Common Stockholders' Profitability Analysis
A company reports the following:
Net income
$125,000
Preferred dividends
000
976,563
Average stockholders' equity
Average common stockholders' equity
588,235
Determine (a) the return on stockholders' equity and (b) the return on common stockholders' equity. If required, round your answers to one decimal place.
a. Return on Stockholders' Equity
0.2 X %
b. Return on Common Stockholders' Equity
%
V Check My VWork
a. Divide net income by average stockholders' equity.
b. Divide net income minus preferred dividends by average common stockholders equity
Check My Work
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