Which of the following would be included in the calculation of net operating working capital? A) Accounts payable? B) Accruals C) Short-term notes payable D) Both A and B ANSWER D
Date: September 19th, 2020
The residual theory of dividends suggests that ________. A) different payout policies attract different types of investors but still do not change the value of a firm B) dividends are irrelevant in determining the value of a firm C) as long as a firm’s equity need exceeds the amount of retained earnings, no cash dividend […]
Date: September 19th, 2020
Spartacus Inc., has sales of $4,500,000, net income of $250,000, assets worth $3,700,000, and total common stockholder equity of $2,500,000. The ROE for Spartacus is: A) 5.56%. B) 6.76%. C) 10.00%. D) 55.56%. ANSWER C Explanation: C) ROE = NI/Equity = $250,000/$2,500,000 = 10.00%
Date: September 19th, 2020
According to the residual theory of dividends, if a firm’s equity need exceeds the amount of retained earnings, the firm would ________. A) borrow to pay the cash dividend B) sell additional stock to pay the cash dividend C) pay no cash dividends D) pay less dividends ANSWER C
Date: September 19th, 2020
Lakeview Industries had sales of $40 million and net income of $2 million in 2012. Lakeview paid a dividend of $1.5 million. Assuming that their beginning balance for retained earnings was $4 million, calculate their ending balance for retained earnings. A) $4.5 million B) $2.5 million C) $3 million D) $4 million ANSWER […]
Date: September 19th, 2020
Modern Comics Inc., has sales of $2,500,000, net income of $50,000, assets worth $1,700,000, and total common stockholder equity of $1,500,000. The ROE for the firm is: A) 68.00%. B) 60.00%. C) 2.94%. D) 3.33%. ANSWER D Explanation: D) ROE = NI/Equity = $50,000/$1,500,000 =3.33%
Date: September 19th, 2020
What is Regency’s net working capital in 2012 and 2011? A) $27 million; $12 million B) $315 million; $276 million C) $39 million; $27 million D) None of the above ANSWER A Explanation: A) NWC = C/A – C/L: 2012 = $171,000,000 – $144,000,000 = $27,000,00. 2011: = $144,000,000 – $132,000,000 = $12,000,000.
Date: September 19th, 2020
A dividend reinvestment plan enables stockholders to ________. A) reinvest the dividends in money market instruments which are risk free B) reinvest all dividends in the firm with no accompanying increase in equity C) acquire additional dividends through redemption of stock D) acquire shares at little or no transaction costs ANSWER D
Date: September 19th, 2020
Which is NOT an example of current liabilities? A) Notes payable B) Accounts receivable C) Current portion of long-term debt D) Taxes payable ANSWER B
Date: September 19th, 2020
At the quarterly meeting of Tangshan Mining Corporation, held on September 10th, the directors declared a $1.00 per share dividend for the firm’s 100,000 shares of common stock outstanding. The net effect of declaring and paying this dividend would be to ________. A) decrease total assets by $100,000 and increase stockholders equity by $100,000 B) […]
Date: September 19th, 2020
