Exercise 13-9 Selected Financial Ratios for Common Stockholders [LO2]

Selected financial data from the September 30 year-end statements of Kosanka Company are given below:


Total assets $ 5,500,000
Long-term debt (11% interest rate) $ 620,000
Preferred stock, $100 par, 5% $ 660,000
Total stockholders’ equity $ 2,900,000
Interest paid on long-term debt $ 68,200
Net income $ 390,000

Total assets at the beginning of the year were $5,300,000; total stockholders’ equity was $2,700,000. There has been no change in preferred stock during the year. The company’s tax rate is 40%.


Compute the return on common stockholders’ equity