The 2017 balance for Mason Electronics reported the following items — with 2016 figures given for comparison

Mason Electronics
Balance Sheet
As of December 31,2017 Mason Electronics
Balance Sheet
As of December 31,2016
Total Assets $571,000 $494,000

Total Liabilities 330,000 284,000
Total Stockholders'
Equity (all common) 241,000 210,000
Total Liabilities and
Stockholders' Equity $571,000 $494,000

Net income for 2016 was $25,000. Compute the rate of return on common stockholders' equity for 2016. (Round to two decimal places. Show your computations.)
A) 4.38%
B) 10.37%
C) 11.09%
D) 4.69%


C .C) Rate of return on common stockholders' equity:
(Net income - Preferred dividends) / Average common stockholders' equity
($25,000 - 0 ) / ($241,000 + $210,000 ) / 2
$25,000 / $225,500 = 11.09%

Business

You might also like to view...

The original process of becoming a team, developed by psychologist Bruce Tuckman in 1965, included four stages. Which stage did Tuckman add later, resulting in five stages of team formation?

A. forming B. norming C. adjourning D. performing

Business

When bonds payable are converted into stock, the carrying value of the bonds should be

a. credited to Retained Earnings. b. credited to contributed capital accounts. c. debited to Retained Earnings. d. debited to Loss on Conversion of Bonds.

Business

Managers wishing to add value to the firm can do this by adding projects with a ________ net present value

A) positive B) negative C) zero D) none of the above

Business

When buying a home, which of the factors below should be considered in the decision process?

A) Interior paint colors B) Homeowner association covenants C) How far away it is from the nearest mall D) A, B and C are all key considerations.

Business