Definitions for "Return on Common Equity"
Net income (or profit) before extraordinary items, less preferred dividends, divided by average common shareholders' equity. Shows that rate of return on the investment for the company's common shareholders, the only providers of capital who do not have a fixed return.
calculated by dividing income from continuing operations (before changes in accounting principles, less preferred stock dividends) by average common share-owners' equity.
Usually refers to the income that the Commission allows an investor-owned utility to make available to common stockholders after servicing existing debt and preferred stock. (Also called “authorized return on equity.”)