The income statement, statement of retained earnings, and balance sheet for Santiago Systems are as follows:

Santiago Systems

Income Statement

For the Year Ended December $31,20$X$2$

Amount Percent

Net sales $$5,345,000100\mathrm{.}0\%$

Less: Cost of goods sold $(3,474,250)65\mathrm{.}0$

Gross margin $$1,870,75035\mathrm{.}0$

Less: Operating expenses $(1,140,300)21\mathrm{.}3$

Operating income $$730,45013\mathrm{.}7$

Less: Interest expense $(27,000)0\mathrm{.}5$

Income before taxes $$703,45013\mathrm{.}2$

Less: Income taxes $(40\%)*(281,380)5\mathrm{.}3$

Net income $$422,0707\mathrm{.}9$

$*$ Includes both state and federal taxes.

Santiago Systems

Statement of Retained Earnings

For the Year Ended December $31,20$X$2$

Balance, beginning of period $$1,205,500$

Net income $422,070$

Total $$1,627,570$

Preferred dividends $(40,000)$

Dividends to common stockholders $(150,000)$

Balance, end of period $$1,437,570$

Santiago Systems

Comparative Balance Sheets

At December $31,20$X$1$ and $20$X$2$

$20$X$120$X$2$

Assets

Current assets:

Cash $$1,900,000$ $$2,100,000$

Marketable securities $350,000400,000$

Accounts receivable $($net$)625,000675,000$

Inventories $230,000240,000$

Other $50,00050,000$

Total current assets $$3,155,000$ $$3,465,000$

Property and equipment:

Land $$900,000$ $$900,000$

Building and equipment $($net$)1,240,8001,192,800$

Total long$-$term assets $$2,140,800$ $$2,092,800$

Total assets $$5,295,800$ $$5,557,800$

Liabilities and Stockholders' Equity

Current liabilities:

Notes payable, short term $$247,300$ $$256,230$

Accounts payable $240,000250,000$

Current maturity of long$-$term debt $3,0004,000$

Accrued payables $150,000160,000$

Total current liabilities $$640,300$ $$670,230$

Long$-$term liabilities:

Bonds payable, $9\%300,000300,000$

Total liabilities $$940,300$ $$970,230$

Stockholders' equity:

Preferred stock, $$25$ par, $8\%$ $$500,000$ $$500,000$

Common stock, $$1\mathrm{.}00$ par $150,000150,000$

Additional paid$-$in capital$*2,500,0002,500,000$

Retained earnings $1,205,5001,437,570$

Total stockholders' equity $$4,355,500$ $$4,587,570$

Total liabilities and stockholders' equity $$5,295,800$ $$5,557,800$

$*$ For common stock only.

Required:

$1.$ Calculate the average common stockholders' equity.

$2.$ Calculate the return on stockholders' equity. Round your answer to two decimal places.