def roce(net_income, preferred_dividends, average_common_equity):
    """Computes return on common equity.

    @params
    -------
    net_income: net income
    preferred_dividends: preferred dividends
    average_common_equity: average common equity

    returns
    -------
    Return on common equity, int or float

    explanation
    -----------

    """
    return (net_income - preferred_dividends) / average_common_equity
