Return on common stockholders' equity is computed by dividing the annual net income available to common stockholders by the average common stockholders' equity for the year.

Question

Quizplus · Accepted Answer

Return on common stockholders' equity measures how effectively a company uses the equity from its shareholders to generate net income. It is calculated by dividing the annual net income available to common stockholders (after preferred dividends have been paid) by the average common stockholders' equity during the period.

Return on Common Stockholders' Equity Is Computed by Dividing the Annual