1. Jones Hardware had common stock of $9,500 and retained earnings of $3,800 at the beginning of

the year. At the end of the year, the common stock balance is $9,600 and the retained earnings account

balance is $4,200. The net income for the year is $840. What is the retention ratio?

a. 40.48 percent

b. 47.62 percent

c. 59.52 percent

d. 52.38percent

2. A firm has a debt-equity ratio of 0.60. What is the equity multiplier if total equity is $5,700?

a. 0.40 b. 0.48 c. 1.40 d. 1.60