Question: Help for Accounting Study Guide ? LO7. How do we use stockholders' equity rations to evaluate business performance? Use the following information for ABC Company

Help for Accounting Study Guide ?

LO7. How do we use stockholders' equity rations to evaluate business performance? Use the following information for ABC Company to calculate the EPS, price/earnings ratio, and return on common stockholders' equity: a. Net Income- $10,000 Preferred Dividends-# $2,000 Average Common Stockholders' Equity $300,000 Number of Common Shares Outstanding- 20,000 shares i) What is earnings per share? ii) What is price/earnings ratio assuming the market price is $2 per share? iii) What is rate of return on common stockholders' equity (take percentage to 2 decimal places)

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