The 2019 balance sheet for Standard Electronics reported the following items - with 2018 figures given for comparison:

Net income for 2019 was $25,000.Compute the rate of return on common stockholders' equity for 2019.(Round your final answer to two decimal places. )

Question

The 2019 balance sheet for Standard Electronics reported the following items - with 2018 figures given for comparison:

Net income for 2019 was $25,000.Compute the rate of return on common stockholders' equity for 2019.(Round your final answer to two decimal places. )

Quizplus · Accepted Answer

C)
Rate of return on common stockholders' equity:
(Net income - Preferred dividends)/ Average common stockholders' equity
($25,000 - 0)/ ($241,000 + $210,000)/ 2
$25,000 / $225,500 = 11.09%

The 2019 Balance Sheet for Standard Electronics Reported the Following