Response to the following questions:
1. a. How does the rate earned on total assets differ from the rate earned on stockholders' equity?
b. Which ratio is normally higher? Explain.
2. a. Why is the rate earned on stockholders' equity by a thriving business ordinarily higher than the rate earned on total assets?
b. Should the rate earned on common stockholders' equity normally be higher or lower than the rate earned on total stockholders' equity? Explain.