EXERCISE 1–1 Refer to the financial statements of Mixon Company in Exercises 1–3 and 1–5. The following additional information about the company is known:

Common stock market price, December 31, 2006 . . . . . . $15.00 Common stock market price, December 31, 2005 . . . . . . 14.00 Annual cash dividends per share in 2006 . . . . . . . . . . . . 0.60 Annual cash dividends per share in 2005 . . . . . . . . . . . . 0.30 To help evaluate the profitability of the company, compute the following for 2006 and 2005:

(a) return on common stockholders’ equity,

(b) price-earnings ratio on December 31, and

(c) dividend yield.