Solution-Calculate the rate of return on common

Calculate the rate of return on common shareholders equity

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Question - Novak Inc. had net income for 2021 of $2,180,000. The company had 770,000 of common shares outstanding throughout the year. During 2021, Novak paid $0.05 dividends per common shares. The average common shareholder equity was $8,778,000, and the market value of the shares on December 31, 2020 was $8 per share.

Novak Inc. also had 290,000 shares outstanding of cumulative, $3, no-par value preferred shares. The shares were outstanding for the full year, and dividends had been paid in all previous years.

Calculate the following ratios for Novak Inc., and round answers to 2 decimal places:

1. Rate of return on common shareholders' equity:

2. Payout ratio:

3. Price earnings ratio:

4. Book value per share:

Reference no: EM132722466

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Calculate the rate of return on common shareholders equity

Reference no: EM132722466

Reference no: EM132722466

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