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    sulu's Avatar
    sulu Posts: 1, Reputation: 1
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    #1

    Jul 18, 2011, 04:40 PM
    Return on common stockholders' equity is computed by dividing net income by ending st
    Is it true of false that Return on common stockholders' equity is computed by dividing net income by ending stockholders' equity?
    Just Looking's Avatar
    Just Looking Posts: 1,610, Reputation: 480
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    #2

    Jul 19, 2011, 07:14 AM

    It is computed using average stockholders' equity, and since it is asking for common stockholders' equity you deduct preferred stock if there is any.
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