Question : 101. The tendency of the rate earned stockholders’ equity to vary : 1239374

 

 

101. The tendency of the rate earned on stockholders’ equity to vary disproportionately from the rate earned on total assets is sometimes referred to as  A. leverageB. solvencyC. yieldD. quick assets

 

102. The balance sheets at the end of each of the first two years of operations indicate the following: 

 

2012

2011

Total current assets

$600,000

$560,000

Total investments

60,000

40,000

Total property, plant, and equipment

900,000

700,000

Total current liabilities

125,000

65,000

Total long-term liabilities

350,000

250,000

Preferred 9% stock, $100 par

100,000

100,000

Common stock, $10 par

600,000

600,000

Paid-in capital in excess of par-common stock

75,000

75,000

Retained earnings

310,000

210,000

 

 

 

If net income is $115,000 and interest expense is $30,000 for 2012 what is the rate earned on total assets for 2012 (round percent to one decimal point)? A. 9.3%B. 10.1%C. 8.0%D. 7.4%

 

103. The balance sheets at the end of each of the first two years of operations indicate the following: 

 

2012

2011

Total current assets

$600,000

$560,000

Total investments

60,000

40,000

Total property, plant, and equipment

900,000

700,000

Total current liabilities

125,000

65,000

Total long-term liabilities

350,000

250,000

Preferred 9% stock, $100 par

100,000

100,000

Common stock, $10 par

600,000

600,000

Paid-in capital in excess of par-common stock

75,000

75,000

Retained earnings

310,000

210,000

 

 

 

If net income is $115,000 and interest expense is $30,000 for 2012, what is the rate earned on stockholders’ equity for 2012 (round percent to one decimal point)? A. 10.6%B. 11.1%C. 12.4%D. 14.0%

 

104. The balance sheets at the end of each of the first two years of operations indicate the following: 

 

2012

2011

Total current assets

$600,000

$560,000

Total investments

60,000

40,000

Total property, plant, and equipment

900,000

700,000

Total current liabilities

125,000

65,000

Total long-term liabilities

350,000

250,000

Preferred 9% stock, $100 par

100,000

100,000

Common stock, $10 par

600,000

600,000

Paid-in capital in excess of par-common stock

75,000

75,000

Retained earnings

310,000

210,000

 

 

 

If net income is $115,000 and interest expense is $30,000 for 2012, what are the earnings per share on common stock for 2012, (round to two decimal places)? A. $2.07B. $1.92C. $1.77D. $1.64

 

105. The balance sheets at the end of each of the first two years of operations indicate the following: 

 

2012

2011

Total current assets

$600,000

$560,000

Total investments

60,000

40,000

Total property, plant, and equipment

900,000

700,000

Total current liabilities

125,000

65,000

Total long-term liabilities

350,000

250,000

Preferred 9% stock, $100 par

100,000

100,000

Common stock, $10 par

600,000

600,000

Paid-in capital in excess of par-common stock

75,000

75,000

Retained earnings

310,000

210,000

 

 

 

If net income is $115,000 and interest expense is $30,000 for 2012, and the market price is $30, What is the price-earnings ratio on common stock for 2012 (Round intermediate calculation to two decimal place and final answers to one decimal place)? A. 16.9B. 12.1C. 14.4D. 13.3

 

106. The numerator of the rate earned on common stockholders’ equity ratio is equal to  A. net incomeB. net income minus preferred dividendsC. income before income taxD. operating income minus interest expense

 

107. The numerator of the rate earned on total assets ratio is equal to  A. net incomeB. net income plus tax expenseC. net income plus interest expenseD. net income minus preferred dividends

 

108. The following information is available for Taylor Company: 

 

   2012

Market price per share of common stock

$25.00

Earnings per share on common stock

$ 1.25

 

 

Which of the following statements is correct? A. The price-earnings ratio is 20 and a share of common stock was selling for 20 times the amount of earnings per share at the end of 2012.B. The price-earnings ratio is 5.0% and a share of common stock was selling for 5.0% more than the amount of earnings per share at the end of 2012.C. The price-earnings ratio is 10 and a share of common stock was selling for 125 times the amount of earnings per share at the end of 2012.D. The market price per share and the earnings per share are not statistically related to each other.

 

109. The following information is available for Dorman Company: 

 

2014

Dividends per share of common stock

$  1.44

Market price per share of common stock

$ 24.00

 

 

Which of the following statements is correct? A. The dividend yield is 6.0%, which is of interest to investors seeking an increase in market price of their stocks.B. The dividend yield is 6.0%, which is of special interest to investors seeking to earn revenue on their investments.C. The dividend yield is 16.7%, which is of interest to bondholders.D. The dividend yield is 16.7% which is an important measure of solvency.

 

110. The particular analytical measures chosen to analyze a company may be influenced by all of the following except: A. industry typeB. capital structureC. diversity of business operationsD. product quality or service effectiveness

 

 

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