North Company Reports the Following Amounts for 2017 The 2017 Rate of Return on Common Stockholders' Equity Is

question 69

Multiple Choice

North Company reports the following amounts for 2017: $$\begin{array} { l r } \text { Net income } & 160,000 \\\text { Average stockholders' equity } & 2,000,000 \\\text { Preferred dividends } & 45,000 \\\text { Par value preferred stock } & 250,000\end{array}$$ The 2017 rate of return on common stockholders' equity is:

• A) 5.8%.
• B) 6.6%.
• C) 8.0%.
• D) 9.1%.

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Definitions:

Cash Dividend

A payment made by a company to its shareholders, usually as a distribution of profits.

Paid-in Capital

Funds received by a company from selling its shares to investors, representing the capital provided by shareholders for use in the business.

Common Stock

A type of security that represents ownership in a corporation, with holders typically having voting rights and potentially receiving dividends.

Noncumulative

Describes preferences or rights that do not carry over or accumulate if they are not used within a certain period.