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 = ?