Compute return on common stockholders equity

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Reference no: EM13513339

On January 1, 2012, Siena Corporation purchased 2,000 shares of treasury stock. Other information regarding Siena Corporation is provided below.


2011

2012

Net income

$110,000

$110,000

Dividends on preferred stock

$10,000

$10,000

Dividends on common stock

$2,000

$1,600

Weighted-average number of shares outstanding

10,000

8,000*

Common stockholders' equity, beginning of year

$500,000

$400,000*

Common stockholders' equity, end of year

$500,000

$400,000

*Adjusted for purchase of treasury stock.

Compute (a) return on common stockholders' equity for each year and (b) earnings per share for each year, and (c) discuss the changes in each.

 

Reference no: EM13513339

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