The Following Financial Information Is Available for Makoto Corporation The Weighted Average Number of Shares of Common Stock Outstanding

question 19

Essay

The following financial information is available for Makoto Corporation. $\begin{array}{lrr}&2017&2016\\\text { Average common stockholders' equity } & \$ 1,600,000 & \$ 1,200,000 \\\text { Dividends paid to common stockholders } & 50,000 & 30,000 \\\text { Dividends paid to preferred stockholders } & 20,000 & 20,000 \\\text { Net income } & 260,000 & 182,000\end{array}$
The weighted average number of shares of common stock outstanding was 80000 for 2016 and 100000 for 2017.
Instructions
Calculate earnings per share and return on common stockholders' equity for 2017 and 2016.

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Definitions:

Consumption Bundle

A combination of different goods and services that a consumer chooses to consume given their budget constraints.

Slope

refers to the steepness, incline, or grade of a straight line, calculated as the ratio of the vertical change to the horizontal change between two points on the line.

Indifference Curves

Graphical representations in microeconomics that show different bundles of goods between which a consumer is indifferent, meaning they have no preference for one over the other.

Consumption Bundle

A combination of various goods and services that an individual consumes at a given time.