Question 16

On January 1, 2014, Dodd, Inc., declared a 15% stock dividend on its common stock when the fair value of the common stock was $30 per share. Stockholders' equity before the stock dividend was declared consisted of:

Common stock, $10 par value, authorized 200,000 shares;
issued and outstanding 120,000 shares	$1,200,000
Additional paid-in capital on common stock	150,000
Retained earnings	700,000
Total stockholders' equity	$2,050,000

What was the effect on Dodd's retained earnings as a result of the above transaction?

Question 17

Presented below is information related to Orender, Inc.:

December 31,
2015	2014
Common stock	$75,000	$60,000
4% Preferred stock	350,000	350,000
Retained earnings (includes net income for current year)	90,000	75,000
Net income for year	35,000	32,000

What is Orender's rate of return on common stock equity for 2015?