A company reports the following: Net income $120,000 Preferred dividends 20,000 Average stockholders equity 600,000 Average common

Question:

A company reports the following:

Net income $120,000
Preferred dividends 20,000
Average stockholders’ equity 600,000
Average common stockholders’ equity 500,000

Determine
(a) The rate earned on stockholders’ equity and
(b) The rate earned on common stockholders’ equity. Round to one decimal place