Hartzog Corporation's most recent balance sheet and income statement appear below: Dividends on common stock during Year 2 totaled $60 thousand. Dividends on preferred stock totaled $5 thousand. The market price of common stock at the end of Year 2 was $7.04 per share.
-The return on common stockholders' equity for Year 2 is closest to:
A)11.33%
B)10.00%
C)10.67%
D)9.41%

Question

Hartzog Corporation's most recent balance sheet and income statement appear below:   Dividends on common stock during Year 2 totaled $60 thousand. Dividends on preferred stock totaled $5 thousand. The market price of common stock at the end of Year 2 was $7.04 per share.
-The return on common stockholders' equity for Year 2 is closest to:
A)11.33% 
B)10.00% 
C)10.67% 
D)9.41%

Quizplus · Accepted Answer

Average common stockholders' equity = ($760 + $740)F1F1F1S1F1F1F10 2 = $750
Return on common stockholders' equity
= (Net income - Preferred dividends)F1F1F1S1F1F1F10 Average common stockholders' equity
= ($85 - $5)F1F1F1S1F1F1F10 $750 = 10.67%

Hartzog Corporation's Most Recent Balance Sheet and Income Statement Appear