Question

Harmony Corporation reported these figures: (Click the icon to view the balance sheet) (Click the icon to view the income statement.) Harmony Corporation has 3,200,000 shares of common stock outstanding. Its stock has traded recently at $27.00 per share. You would better understanding of Harmony Corporation's financial position. Assume all sales are on credit. Read the requirement to the industry average to better determine if it is reasonable g. Return on stockholders' equity Enter the formula on the first line, then calculate the return on stockholders' equity on the next line. (Enter amounts in thousands as prov in the problem statement. Round the percentage to the nearest whole percent. For accounts with a zero balance enter $0 where approp - Preferred dividends Average common equity Net income 2400 = Rate of return on equity

Answer 1

(Net Income - Preferred Dividends)/Average Common Equity = Rate of Return on equityl $2,400 - $0)/ $12,000 20% Average Common Equity = (Beginning Common Equity+Ending Common Equity)/2 Average Common Equity = ($8500+$15500)/2