Enter the annual dividends ($) and the total common equity invested ($) into the Return on Common Equity Calculator. The calculator will evaluate and display the Return on Common Equity.

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## Return on Common Equity Formula

The following formula is used to calculate the Return on Common Equity.

**ROCE = AD / EI *100**

- Where ROCE is the Return on Common Equity (%)
- AD is the annual dividends ($)
- EI is the total common equity invested ($)

## How to Calculate Return on Common Equity?

The following example problems outline how to calculate Return on Common Equity.

Example Problem #1:

- First, determine the annual dividends ($).
- The annual dividends ($) is given as: 165.

- Next, determine the total common equity invested ($).
- The total common equity invested ($) is provided as: 2000.

- Finally, calculate the Return on Common Equity using the equation above:

ROCE = AD / EI *100

The values given above are inserted into the equation below and the solution is calculated:

ROCE = 165 / 2000 *100 = 8.25 (%)

Example Problem #2:** **

For this problem, the variables needed are provided below:

annual dividends ($) = 80

total common equity invested ($) = 500

This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer.

ROCE = AD / EI *100** = ?**