please let me know if I'm right

Question

common stock $600
additional paid-in capital $250
retained earnings $370
net income for year $240
I need return on common stockholder's equity=net income/stock equity=240/600=0.4

Answer 1

Do you mean return on common sh equity rate?

(Net income – Preferred dividends)
÷ Average common stockholders’ equity

That is the formula. Since you do not have any preferred dividends then you can leave it out.

Answer 2

thanks :)

Answer 3

took my test. answer 0.4 is not right :( I don't understand then....