A) Common Stockholders' Profitability Analysis A company reports the following: Net income $250,000 Preferred dividends 10,000 Average
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A) Common Stockholders' Profitability Analysis
A company reports the following:
| Net income | $250,000 |
| Preferred dividends | 10,000 |
| Average stockholders' equity | 2,118,644 |
| Average common stockholders' equity | 1,121,495 |
Determine (a) the return on stockholders’ equity and (b) the return on common stockholders’ equity. If required, round your percentages to one decimal place.
| a. Rate earned on stockholders' equity | % |
| b. Rate earned on common stockholders' equity | % |
B) Earnings per Share and Price-Earnings Ratio
A company reports the following:
| Net income | $447,500 |
| Preferred dividends | $25,000 |
| Shares of common stock outstanding | 65,000 |
| Market price per share of common stock | $65 |
a. Determine the company's earnings per share on common stock. Round your answer to the nearest cent. Use the rounded answer of requirement a for subsequent requirement, if required.
$
b. Determine the company's price-earnings ratio. Round to one decimal place.
Expert Answer:
A a Return on Stockholders Equity Return on Stockholders Equity helps to judge profitability of any company from the view point of stockholders Here s... View the full answer
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