Patton Corporation had the following items on its financial statements for Years 1 and 2

Patton's rate earned on stockholders' equity for Year 2 is

a. 8.7%.

b. 9.5%.

c. 9.1%.

d. None of these choices are correct

Financial Statement Item Year 2 Revenue $2,500,000 Net income 800,000 Interest expense Income tax expense Current assets Machinery, net Buildings, net Total assets Current liabilities Noncurrent liabilities Total liabilities Total stockholders' equity Tax rate 9,500 320,000 50,000 10,000 90,000 150,000 40,000 50,000 90,000 110,000 40% Year 1 $2,000,000 600,000 9,000 240,000 30,000 10,000 90,000 140,000 30,000 45,000 75,000 65,000 40%