1.

Common Stockholders' Profitability Analysis

A company reports the following:

Net income	$180,000
Preferred dividends	7,200
Average stockholders' equity	1,682,243
Average common stockholders' equity	834,783

Determine (a) the the return on stockholders equity and (b) the return on common stockholders equity. If required, round your percentages to one decimal place.

a. The rate earned on stockholders' equity	%
b. The rate earned on common stockholders' equity	%

2.

Earnings per Share and Price-Earnings Ratio

A company reports the following:

Net income	$430,000
Preferred dividends	$24,000
Shares of common stock outstanding	70,000
Market price per share of common stock	$51.62

a. Determine the company's earnings per share on common stock. Round your answer to the nearest cent. Use the rounded answer of requirement a for subsequent requirement, if required. $

b. Determine the company's price-earnings ratio. Round to one decimal place.