1 (20 points): The sales review of Emirates Investment Bank is 800K (AED). The cost of goods is 220K and the operating expenses is 150K. EIB pays an annual interest of 50K. It was found that the EPS for Emirates Investment Bank is 1.2 AED while the DPS is 0.8 AED, 1. What is the earning available for common stock holders if the total dividends delivered to share holders is 200K. 2. What is the amount of tax paid. 3. If the total liability + the stock holders equity is 5000K (AED), the total liability is 3500 (AED) and the preferred stock equity is 150K in AED, What is the ROE: Question 2 (15 points): 1. Explain why the gross profit margin will always be below 100%. 2. Suppose the cost of goods sold is 20 thousands. Sketch the gross profit margin on the diagram below. Start with sales of 20 thousands. 1 0.9 Gross Profit Margin 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 50 100 150 200 250 300 Sales (Thousands) Question 3 (20 points): Two firms (Cyber Electronics and High-tech) are conducting the same business in chip manufacturing. The two companies have the same processes and suppliers, however, Cyber electronics faces lower gross profit margin as compared to High-tech. The gross profit margin for cyber electronics was 30%, while that of High-tech is 50%. Both companies have the same sales. Answer the following: 1. What is the reason of this difference in gross profit margin? 2. By how much as a percent, the costs in both companies may differ. 3. If the total cost for both cyber electronics and high-tech is $24,000, what would be the cost of goods sold for both companies