During 2019, Troy, Inc.'s net income was $1,400,000. Its common stockholders' equity was $4,200,000 at January 1, 2019 and $5,400,000 at December 31, 2019. During December 2019, Troy's board of directors declared a $450,000 preferred stock dividend and a $360,000 common stock dividend.
What is Troy's 2019 return on common stockholders' equity?

Question

Quizplus · Accepted Answer

($1,400,000 - $450,000) / [($4,200,000 + $5,400,000) / 2] = 19.8%