The net income of a company for the year was $570,000.The company has no preferred stock.Common stockholders' equity was $1,700,000 at the beginning of the year and $2,300,000 at the end of the year.Calculate the rate of return on common stockholders' equity.(Round your answer to two decimal places. )
A)24.78%
B)19.86%
C)33.53%
D)28.50%

Question

Quizplus · Accepted Answer

D)Rate of return on common stockholders' equity = (Net Income - Preferred dividend)/ Average common stockholders' equity = $570,000 / [($1,700,000 + $2,300,000)/ 2] = $570,000 / 2,000,000 = 28.50%

The Net Income of a Company for the Year Was