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.)
A) 4.38%
B) 10.37%
C) 11.09%
D) 4.69%

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.)
A) 4.38% 
B) 10.37% 
C) 11.09% 
D) 4.69%

Quizplus · Accepted Answer

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