15. If the interim dividend was 5c per ordinary share, the final dividend 7c per share and the market price per share on 30 June 2014 $3.20, the dividend yield is:

a. 3.75%. b. 37.5%. c. 26.7%. d. 6%.

16. Per share Carrying value on 31 December, current year $25 Quoted market value on 31 December, current year 30 Earnings per share for the current year 6 Dividend per share for the current year 3 The priceearnings ratio of the shares for the current year is:

a. 4.2 to 1. b. 5 to 1. c. 8.3 to 1. d. 10 to 1.

17. Which statement concerning the current (working capital) ratio is incorrect?

a. A low current ratio may indicate difficulty in meeting short-term commitments. b. The current ratio can be manipulated at balance date, e.g. by using cash to pay off short-term debt. c. A high current ratio may indicate excessive investment in working capital. d. A current ratio of $1.50 of current assets for each $1 of current liabilities should always be maintained.

18. Kaplan has a current ratio of 2.5 to 1 and current liabilities of $12 000. If Kaplan has $9000 of inventory what is the quick ratio?

a. 2.25 to 1 b. 2.00 to 1 c. 1.75 to 1 d. 1.50 to 1

19. Buyer Co has ordered goods on credit from Seller Co. Before Seller ships the goods it would like to be sure that Buyer will be able to pay for them within the normal credit period. Assuming Seller has access to Buyer's financial statements, in which of the following ratios will Seller be most interested?

a. Dividend yield ratio b. Price earnings ratio c. Debt ratio d. Current ratio

20. An increase in the inventory turnover ratio is normally considered to be favourable but could be unfavourable if it means:

a. inventory is less likely to become obsolete. b. liquidity is greater. c. the firm not carrying enough inventory to meet its customers needs. d. storage costs of inventory are lower.

21. Which statement relating to the debt ratio of a company is not true?

a. It can be calculated by relating liabilities to total funds. b. It is an indicator of a company's long-term solvency. c. It is a measure of the extent of a company's gearing. d. A higher level of debt is normally preferable from a creditor's point of view.