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meriva
3 years ago
5

In the current year, Hermanson Corporation reported net income of $240,000, paid dividends of $25,000 on common stock, and $40,0

00 of dividends on preferred stock. Hermanson Corporation’s common stockholders’ equity was $700,000 at the beginning of the year and its common stockholders’ equity is $900,000 at the end of the year. The company’s return on common stockholders’ equity for the current year is
Business
1 answer:
ExtremeBDS [4]3 years ago
3 0

Answer:

Return on Common Equity: 12.5%

Explanation:

\frac{income - preferred \: \: stock \: \: dividends}{common \: \: equity}

equity income

240,000 - 40,000 = 200,000

average common equity:

700,000 + 900,000 = 1,600,000

return on common equity:

200,000 / 1,600,000 = 0.125 = 12.5%

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2 years ago
Fact pattern 33-1a berry indicates that she is acting as an agent on behalf of an unidentified client—cuisine catering, llc—when
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