On January 1, 2010, Tuscany Corporation purchased 1,000 shares of treasury stock. Other information regarding Tuscany Corporation is provided below.
|
2009 |
2010 |
|
|
Net income |
$200,000 |
$210,000 |
|
Dividends on preferred stock |
$30,000 |
$30,000 |
|
Dividends on common stock |
$20,000 |
$25,000 |
|
Weighted average number of common shares outstanding |
10,000 |
9,000 |
|
Common stockholders’ equity beginning of year |
$600,000 |
$750,000 |
|
Common stockholders’ equity end of year |
$750,000 |
$830,000 |
Compute (a) return on common stockholders’ equity for each year and (b) earnings per share for each year, and (c) discuss the changes in each.