3. Below is the common equity section (in millions of Timeless Technology's last two year-end balance heets: 2011 2017 Common stock 2.000 1.000 Retained earnings 2.000 2.340 Totalcommon equity 4.000653,340 The firm has never paid a dividend to its common stockholders. Which of the following statements is The company's net income in 2018 was higher than in 2017. The fin d common stock in 2018 the market price of the firm's stock doubled in 2018 The firm had positive net income in both 2017 and 2018, but its net income in 2018 was lower s. The company has more equity than debt on its balance sheet I Which of the following is CORRECT Typically, a firm's DPS should exceed its EPS Typically, a firm's not income should exceed its EBIT. ra firm is more profitable than average, we would normally expect to see its stock price exceed its book value per share. ra firm is more profitable than most other forms, we would normally expect to see its book value per share exceed its stock price, especially after several years of high inflation The more depreciation a firm has in a given year, the higher its EPS, other things held konstant 1. On its 12/31/18 balance sheet, Barnes Inc showed S$10 million of retained camnings, and exactly that ame amount was shown the previous year. Assuming that no camins restatements were issued, which of the following statements is CORRECT? 1. Ir the company lost money in 2018, it must have paid dividends. The company must have had zero net income in 2018 I The company must have paid out half of its 2018 earnings as dividends 1. The company must have paid no dividends in 2018 Pividends could have been paid in 2018, but they would have had to equal the camings for the Which of the following statements is CORRECT? The more depreciation a firm reports, the higher its tax bill other things held constant Because a firm's cash flow is shown as the lowest entry on the income statement, people often Lall it the bottom line Depreciation reduces a firm's cash balance, so an increase in depreciation would normally do reaction in the firm's cash flow Derating income is derived from the firm's regular core business Operating income is Lalculated as Revenues less Operating costs. Operating costs do not include interest or taxes Depreciation is not a cash charge, so it does not have a lot on a firm's reported profits Which of the following factors would explain how a company's cash balance could have increased Even though the company had a n ative cash flow last year! The company old a new issue of bonds. The company made a large investment in a new plant and The company paid a large dividend The company had high depreciation expenses. The company repurchased 20% of its common stock