The net income of a company for the year was $570,000 The company has no preferred stock. Common stockholders' equity was $1,800,000 at the beginning of the year and $2,300,000 at the end of the year. Calculate the rate of return on common stockholders' equity. (Round your answer to two decimal places.)
A) 24.78%
B) 19.86%
C) 31.67%
D) 27.80%
D .D) Rate of return on common stockholders' equity = (Net Income - Preferred dividend) / Average common stockholders' equity = $570,000 / [($1,800,000 + $2,300,000 ) / 2] = $570,000 / 2,050,000 = 27.80%
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