A company reports the following: Net income....................................$ 375,000 Preferred dividends..............................75,000 Average stockholders' equity...............2,500,000 Average common stockholders' equity...1,875,000

Question:

A company reports the following:
Net income....................................$ 375,000
Preferred dividends..............................75,000
Average stockholders' equity...............2,500,000
Average common stockholders' equity...1,875,000
Determine
(a) The rate earned on stockholders' equity and
(b) The rate earned on common stockholders' equity. Round to one decimal place.