What are the rate of return on stockholders’ equity and the rate of return on common stockholders’ equity (rounded to the nearest one-tenth of a percent) given the following information:
|
Net Income |
$350,000 |
|
Preferred Dividends |
20,000 |
|
Common Stock |
48,000 |
|
Common Stockholders’ Equity 1/1/2011 |
4,400,000 |
|
Total Stockholders’ Equity 1/1/2011 |
5,300,000 |
|
Total Stockholders’ Equity 12/31/2011 |
5,500,000 |
A. Return on Stockholders’ Equity: 6.5 %; Return on Common Stockholders’ Equity: 7.6%
B. Return on Stockholders’ Equity: 8.1 %; Return on Common Stockholders’ Equity: 9.2%
C. Return on Stockholders’ Equity: 7.8 %; Return on Common Stockholders’ Equity: 8.9%
D. Return on Stockholders’ Equity: 5.6 %; Return on Common Stockholders’ Equity: 6.7%