Net income attributable to common stockholders' equity of Florida Corporation during 1979 was \(\$ 250,000\). Earnings per share were \(\$ .50\) during the period. The average common stockholders' equity during 1979 was \(\$ 2,500,000\). The market price at year-end was \(\$ 6.00\) per share.

a Determine the rate of return on common stockholders' equity for 1979.

b Determine the rate of return currently being earned on the market price of the stock (the ratio of earnings per common share to market price per common share).

c Why is there a difference between the rates of return determined in parts \(\mathbf{a}\) and \(\mathbf{b}\) ?