Exercise 11-13

Kojak Corporation decided to issue common stock and used the $300,000proceeds to redeem all of its outstanding bonds on January 1, 2017. The following information is available for the company for 2017 and 2016.

2017

2016

Net income$182,000$150,000Dividends declared for preferred stockholders8,0008,000Average common stockholders' equity1,000,000700,000Total assets1,200,0001,200,000Current liabilities100,000100,000Total liabilities200,000500,000

(a)

Compute the return on common stockholders' equity for both years.(Round answers to 1 decimal place, e.g. 12.5%.)

2017

2016

Return on common stockholders' equity ratio

%

%

(c1)

Compute the debt to assets ratio for both years.(Round answers to 1 decimal place, e.g. 12.5%.)

2017

2016

Debt to assets ratio

%

%