Question

The following information pertains to Marsh Company for the current! year: Average total assets, $400,000 Average common stockholders' equity, $200,000 Sales, $120,000 Net income, $24,000 Dividends on common stock, $9,000 Dividends on preferred stock, $6,000 What is the company's return on common stockholders' equity for the current year? 7.5%. 60%. 9%. 4.5% 12%.

Answer 1

Answer- The company’s return on common stockholders’ equity for the current year =9%.

Explanation- Return on common stockholder’s equity=Net income-Preferred dividends/Average common stockholder’s equity

= {($24000-$6000)/$200000}

= ($18000/$200000)*100

= 9%