learning objective 2 6 questions 1 which financial ratio is required to be reported 4307429

learning objective 2 6 questions 1 which financial ratio is required to be reported 4307429

Learning Objective 2.6 Questions

1) Which financial ratio is required to be reported on the face of the income statement of publicly-held corporations?

A) Earnings per share

B) Price-earnings ratio

C) Dividend-yield ratio

D) Dividend payout ratio

E) Inventory turnover ratio

2) Which financial ratio measures how much the investing public is willing to pay for a chance to share the company's potential earnings?

A) Earnings per share

B) Price-earnings ratio

C) Dividend-yield ratio

D) Dividend payout ratio

E) Profit margin ratio

3) Mason Manufacturing had 2012 earnings of $850,000. Cash dividends per share were $1.25. The company had an average of 350,000 shares of common stock outstanding. The market price of the stock at the end of the year was $30 per share. What are the earnings per share for 2012?

A) $ 1.50.

B) $24.00.

C) $ 2.43.

D) $ 21.50.

E) This cannot be determined from the information given.

4) Mason Manufacturing had 2012 earnings of $850,000. Cash dividends per share were $1.25. The company had an average of 350,000 shares of common stock outstanding. The market price of the stock at the end of the year was $30 per share. What was the price-earnings ratio for Mason Manufacturing?

A) 24.0

B) 18.4

C) 9.36

D) 12.35

E) Cannot be determined from the information provided

5) Mason Manufacturing had 2012 earnings of $850,000. Cash dividends per share were $1.25. The company had an average of 350,000 shares of common stock outstanding. The market price of the stock at the end of the year was $30 per share. What was the dividend-yield for Mason Manufacturing?

A) 4.17%

B) 1.25%

C) 4.80%

D) 15.0%

E) Cannot be determined from the information provided

6) Stone, Inc. had 2012 earnings of $1,500,000. Cash dividends per share were $0.50. The company had an average of 1,225,000 shares of common stock outstanding. The market price of the stock at the end of the year was $6.00 per share. What was the earnings per share for 2012?

A) $0.60

B) $0.75

C) $1.22

D) $1.25

E) $5.50

7) Stone, Inc. had 2012 earnings of $1,500,000. Cash dividends per share were $0.50. The company had an average of 1,225,000 shares of common stock outstanding. The market price of the stock at the end of the year was $6.00 per share. What was the price-earnings ratio for Stone, Inc.?

A) 6.5

B) 4.92

C) 3.00

D) 12

E) 5.20

8) Stone, Inc. had 2012 earnings of $1,500,000. Cash dividends per share were $0.50. The company had an average of 1,225,000 shares of common stock outstanding. The market price of the stock at the end of the year was $6.00 per share. What was the dividend-yield for Stone, Inc.?

A) 12.00%

B) 10.00%

C) 20.33%

D) 8.33%

E) Cannot be determined from the information provided

9) Which financial ratio measures the return on an investment in common stock by dividing the cash dividends per share by the market price per share?

A) Earnings per share

B) Price-earnings ratio

C) Dividend-yield ratio

D) Dividend payout ratio

E) Accounts receivable turnover ratio

10) The dividend-yield ratio must appear on the face of the balance sheet.

11) Another name for the P-E ratio is the earnings multiple.

12) The price-earnings ratio is earnings per share of common stock divided by the market price per share of common stock.

13) The dividend-yield ratio is computed as the current market price of the stock divided by the current dividend per share.

14) Companies with exceptional growth (growth stocks) tend to pay a higher percentage of their earnings in dividends.

15) The dividend-payout ratio is computed as common dividends per share divided by earnings per share.

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