Calculating return on equity (Learning Objective 8) 10–15 min.

Assume that Simmons, Inc., has the following data:

Net income for 2014 ........................................................................................

Preferred dividends for 2014 ...........................................................................

Total stockholder’s equity, 12/31/2014............................................................

Total stockholder’s equity, 12/31/2013............................................................

Common stockholder’s equity, 12/31/2014 .....................................................

Common stockholder’s equity, 12/31/2013 .....................................................

$ 136,400

$ 21,800

$1,640,000

$1,590,000

$1,440,000

$1,350,000 Requirements 1. Calculate Simmons’ return on equity for 2014.

2. Comment on Simmons’ performance during 2014.

AppendixLO1