E12-35B. (Learning Objectives 4: Evaluating a share as an investment) Evaluate the ordinary share of Basic Distributing Company as an investment. Specifically, use the three ordinary share ratios to determine whether the ordinary share increased or decreased in attractiveness during the past year.

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Net income... Dividends to ordinary shares........... Total shareholders' equity at year-end... (includes 90,000 ord. shares) Preference shares, 5%.......... Market price per ordinary share at year-end........... 20X6 20X5 $ 92,000 $98,000 28,000 13,000 575,000 525,000 90,000 90,000 $ 24.00 $ 25.16