Common stockholders’ profitability analysis OBJ. 3 A company reports the following:

Net income $1,000,000 Preferred dividends 50,000 Average stockholders’ equity 6,250,000 Average common stockholders’ equity 3,800,000 Determine

(a) the rate earned on stockholders’ equity and

(b) the rate earned on common stockholders’ equity. Round to one decimal place.