Harris Corporation had net income of $180,000 and paid dividends of $50,000 to ordinary shareholders and $20,000 to preference shareholders in 2014. Harris Corporation's ordinary shareholders' equity at the beginning and end of 2014 was $870,000 and $1,130,000, respectively. There are 100,000 weighted-average ordinary shares outstanding. Harris Corporation's return on ordinary shareholders' equity was

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Return on ordinary shareholders' equity is calculated as (Net Income - Preference Dividends) / Average Ordinary Shareholders' Equity. Here, it is ($180,000 - $20,000) / (($870,000 + $1,130,000) / 2) = $160,000 / $1,000,000 = 16%.

Harris Corporation Had Net Income of $180,000 and Paid Dividends