11) On December 31, Mercury Corporation has the following data available:
Net Income
|
$180,000
|
Interest expense
|
20,000
|
Preferred dividends
|
30,000
|
Total assets at the beginning of the year
|
860,000
|
Total assets at the end of the year
|
740,000
|
Total common stockholders' equity at the beginning of the year
|
520,000
|
Total common stockholders' equity at the end of the year
|
480,000
|
What is return on equity?
A) 30%
B) 34.6%
C) 36%
D) 38%
12) On December 31, Copper Corporation has the following data available:
Net Income
|
$180,000
|
Interest expense
|
20,000
|
Preferred dividends
|
30,000
|
Total assets at the beginning of the year
|
860,000
|
Total assets at the end of the year
|
740,000
|
Total common stockholders' equity at the beginning of the year
|
520,000
|
Total common stockholders' equity at the end of the year
|
480,000
|
What is the leverage ratio?
A) 0.6
B) 1.5
C) 1.6
D) 1.65
13) If a company has common stock and preferred stock outstanding, book value per share is calculated as:
A) total paid-in capital divided by the number of common shares of stock outstanding.
B) total paid-in capital divided by the number of common shares issued.
C) total stockholders' equity minus preferred equity divided by the number of common shares outstanding.
D) total stockholders' equity minus preferred equity divided by the number of common shares issued.
14) On December 31, Sulfur Corporation has the following data available:
Net Income
|
$100,000
|
Interest expense
|
20,000
|
Preferred dividends
|
10,000
|
Total assets at the beginning of the year
|
700,000
|
Total assets at the end of the year
|
800,000
|
Total stockholders' equity at the beginning of the year
|
400,000
|
Total stockholders' equity at the end of the year
|
300,000
|
What is return on assets?
A) 11.25%
B) 12%
C) 12.5%
D) 13.3%
15) On December 31, Mosaic Corporation has the following data available:
Net Income
|
$100,000
|
Interest expense
|
20,000
|
Preferred dividends
|
10,000
|
Total assets at the beginning of the year
|
700,000
|
Total assets at the end of the year
|
800,000
|
Total common stockholders' equity at the beginning of the year
|
400,000
|
Total common stockholders' equity at the end of the year
|
300,000
|
What is return on equity?
A) 25%
B) 25.7%
C) 28.6%
D) 30%
16) On December 31, Bamber Corporation has the following data available:
Net Income
|
$100,000
|
Interest expense
|
20,000
|
Preferred dividends
|
10,000
|
Total assets at the beginning of the year
|
700,000
|
Total assets at the end of the year
|
800,000
|
Total common stockholders' equity at the beginning of the year
|
400,000
|
Total common stockholders' equity at the end of the year
|
300,000
|
What is the leverage ratio?
A) 1.6
B) 2.0
C) 2.14
D) 3.0
17) Using DuPont analysis, what are the components of return on stockholders' equity?
A) Return on Sales and Leverage Ratio
B) Return on Sales, Debt Ratio and Asset Turnover Ratio
C) Return on Assets and Debt Ratio
D) Net Profit Margin Ratio, Asset Turnover Ratio, and Leverage Ratio
18) Using DuPont analysis, what are the components of return on assets?
A) Return on Sales and Debt Ratio
B) Return on Sales and Leverage Ratio
C) Return on Sales and Total Asset Turnover Ratio
D) Total Asset Turnover Ratio and Leverage Ratio