A Company Had a Return on Common Stockholders' Equity of 25%.Net

question 124

Multiple Choice

A company had a return on common stockholders' equity of 25%.Net income equaled $200,000 and average common stockholders' equity equaled $700,000.Compute the amount of the preferred dividends declared.

• A)$200,000
• B)$500,000
• C)$50,000
• D)$25,000
• E)$175,000

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Definitions:

Investment Projects

Initiatives undertaken by a business or individual involving the allocation of resources with the expectation of generating future returns.

Profitability Index

A financial tool used to evaluate the attractiveness of an investment by calculating the ratio of the present value of future cash flows to the initial investment cost.

Investment Proposals

Formal suggestions for investing in specific projects or assets, typically evaluated for potential returns, risks, and strategic fit with the company.

Profitability Index

A financial metric that measures the return on investment for a project or investment by dividing the present value of future cash flows by the initial investment.