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E11-13 Kojak Corporation decided to issue common stock and used the $300,000 pro- Calculate re ceeds to redeem all of its outstanding bonds on January 1, 2017. The following informa- profitability tion is available for the company for 2017 and 2016. (LO 4), A 2017 2016 Net income Dividends declared for preferred stockholders Average common stockholders' equity Total assets Current liabilities Total liabilities S 182,000 150,000 8,000 700,000 1,200,000 1,200,000 100,000 500,000 8,000 1,000,000 100,000 200,000 Instructions (a) Compute the return on common stockholders' equity for both years. (b) Explain how it is possible that net income increased but the return on common stock holders' equity decreased. (c) Compute the debt to assets ratio for both years, and comment on the implications of this change in the company's solvency