accounting

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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

  • accounting -

    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.

  • accounting -

    thanks :)

  • accounting -

    took my test. answer 0.4 is not right :( I don't understand then....

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