Financial statements for Larkins Company appear below:

Dividends during Year 2 totaled $135 thousand, of which $12 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $150.

-Larkins Company's return on common stockholders' equity for Year 2 was closest to:
A) 23.5%
B) 25.9%
C) 26.9%
D) 24.4%

Question

Financial statements for Larkins Company appear below:

Dividends during Year 2 totaled $135 thousand, of which $12 thousand were preferred dividends. The market price of a share of common stock on December 31, Year 2 was $150.

-Larkins Company's return on common stockholders' equity for Year 2 was closest to:
A) 23.5% 
B) 25.9% 
C) 26.9% 
D) 24.4%

Quizplus · Accepted Answer

The return on common stockholders' equity is calculated by dividing net income by average common stockholders' equity. The closest percentage to the calculated value for Year 2 is 25.9%.

Financial Statements for Larkins Company Appear Below