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.

## 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:

1. First, determine the annual dividends (\$).
• The annual dividends (\$) is given as: 165.
2. Next, determine the total common equity invested (\$).
• The total common equity invested (\$) is provided as: 2000.
3. 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 = ?