Answer:
13.3%
Explanation:
Given: Beginning Common Stockholders’ Equity: $10,317,000.
Ending Common Stockholders’ Equity: $10,662,000.
Net Income: $1,429,000
Preferred stock: 8000 shares 6% at $75.
First, let calculate average common stockholder equity.
Average common stockholder equity=
⇒ Average common stockholder equity=
∴ Average common stockholder equity= $10489500.
Now, calculating preferred dividend.
⇒ Preferred dividend=
∴ Preferred dividend= $36000.
Next, computing return on common shareholder equity.
Return on equity=
Return on equity=
∴ Return on equity= 13.3%
∴ Return on common stockholders´ equity is 13.3%