26. A firm's cash dividends were $3.96 per share of common stock for calendar 2006. In 2007 the stock was split 3 for 1, and in 2008 a 10% stock dividend was issued. Dividends per share for 2006, to be reported in the firm's annual report for 2008, are: A) $3.96 B) $1.45 C) $1.32 D) $1.20 27. For 2006, Skresso Co. reported $3.64 of earnings per share of common stock. During 2007 the firm had a 4% common stock dividend. 2006 earnings per share to be reported in the annual report for 2007 are: A) $3.79 B) $3.64 C) $3.50 D) $3.49 28. Management's use of resources can best be evaluated by focusing on measures of: A) liquidity. B) activity. C) leverage. D) book value. 29. An individual interested in making a judgment about the profitability of a company should: A) review the trend of working capital for several years. B) calculate the company's ROI for the most recent year. C) review the trend of the company's ROI for several years. D) compare the company's ROI for the most recent year with the industry average ROI for the most recent year. A: $3.79 B: $3.64 C: $3.50 D:$3.49 32. If a firm's payment terms for sales made on account to its customers were 2/10, n30, the number of days' sales in accounts receivable would be expected to be: A) less than 10. B) between 10 and 25. C) between 25 and 40. D) over 40. 35. A management that wanted to increase the financial leverage of its firm would: A) raise additional capital by selling common stock. B) use excess cash to purchase preferred stock for the treasury. C) raise additional capital by selling fixed interest rate long-term bonds. D) try to increase its ROI by increasing asset turnover. 36. If a firm's debt ratio were 25%, its debt/equity ratio would be: A) 25%. B) 50%. C) 33.33%. D) 75%. 37. A leverage buyout refers to: A) one firm issues stock to take over another firm. B) one firm trades its stock for the stock of another firm. C) a firm goes heavily into debt in order to obtain the funds to purchase the shares of the public stockholders. D) one firm pays cash for the shares of a takeover firm's shares. 38. For the fiscal year ended March 31, 2007, a company reported earnings per share of $3.25 and cash dividends per share of $0.50. During fiscal 2008, the company had a 3 for 2 stock split. In the annual report for the fiscal year ended March 31, 2008, earnings per share and cash dividends for fiscal 2007 would be reported, respectively, as: A) $3.25 and $0.50 B) $4.85 and $0.75 C) $2.17 and $0.33 D) $1.09 and $0.17