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On January 1, 2020, Oriole Corporation purchased 1,200 shares of treasury stock. Other information regarding Oriole Corporation is provided as follows.
2019 2020
Net income $195,000 $220,000Dividends on preferred stock $30,000 $30,000Dividends on common stock $18,000 $23,000Common stockholders' equity beginning of year $605,000 $656,000Common stockholders' equity end of year $656,000 $741,000
Question 1: Compute return on common stockholders' equity for each year.
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
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