Goin Company reports the following amounts for 2013: $$\begin{array} { l r }
\text { Net income } & 150,000 \
\text { Average stockholders' equity } & 2,000,000 \
\text { Preferred dividends } & 48,000 \
\text { Parvalue preferred stock } & 200,000
\end{array}$$ The 2013 rate of return on common stockholders' equity is:

Question

Goin Company reports the following amounts for 2013: $$\begin{array} { l r } 
\text { Net income } & 150,000 \
\text { Average stockholders' equity } & 2,000,000 \
\text { Preferred dividends } & 48,000 \
\text { Parvalue preferred stock } & 200,000
\end{array}$$ The 2013 rate of return on common stockholders' equity is:

Quizplus · Accepted Answer

The rate of return on common stockholders' equity is calculated as (Net Income - Preferred Dividends) / Average Common Stockholders' Equity. Here, it is (150,000 - 48,000) / (2,000,000 - 200,000) = 102,000 / 1,800,000 = 5.7%.

Goin Company Reports the Following Amounts for 2013 The 2013 Rate of Return on Common Stockholders' Equity Is