posted by sasha on .
please let me know if I'm right
common stock $600
additional paid-in capital $250
retained earnings $370
net income for year $240
I need return on common stockholder's equity=net income/stock equity=240/600=0.4
Do you mean return on common sh equity rate?
(Net income – Preferred dividends)
÷ Average common stockholders’ equity
That is the formula. Since you do not have any preferred dividends then you can leave it out.
took my test. answer 0.4 is not right :( I don't understand then....