Reference no: EM132568829
Question - On January 1, 2018 ,Herron Corporation purchased 5,000 shares of treasury stock. Other information regarding Herron Corporation is provided as follows. Compute (a) return on common stockholders' equity for each year, and (b) discuss the changes in each.
2018 2017
Net income $100,000 $110,000
Dividends on preferred stock $30,000 $30,000
Dividends on common stock $25,000 $15,000
Weighted-average number of common shares outstanding $45,000 $50,000
Common stockholders' equity beginning of year $750,000 $685,000
Common stockholders' equity end of year $795000 $750,000