This financial Information is available for Pharoah Corporation. 2020 2019 Average common stockholders' equity $1,850,000 $2,040,000...

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This financial Information is available for Pharoah Corporation. 2020 2019 Average common stockholders equity $1,850,000 $2,

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Answer 1

Answer #1

2019

Earnings per share = (Net income – Preferred stock dividend)/Weighted Average number of common shares outstanding

= (240,500 - 20,500)/175,000

= 220,000/175,000

= $1.26

Return on common stockholders’ equity = (Net income – Preferred dividends)/Average common stockholders’ equity

= (240,500 - 20,500)/2,040,000

= 220,000/2,040,000

= 10.78%

2020

Earnings per share = (Net income – Preferred stock dividend)/Weighted Average number of common shares outstanding

= (293,500 - 20,500)/149,500

= 273,000/149,500

= $1.83

Return on common stockholders’ equity = (Net income – Preferred dividends)/Average common stockholders’ equity

= (293,500 - 20,500)/1,850,000

= 273,000/1,850,000

= 14.76%

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