• 30. Both Alpha Corporation and Beta Corporation operate in the same industry. Alpha's return on assets is 4 percentage points higher than Beta. However, Alphas return on equity is over 9 percentage points higher than Beta. Which of the following helps explain this?
  • betas profit margin is much higher than that of alpha
  • Alpha focuses more on asset turnover than profit margin
  • Alpha has a higher debt to equity ratio than beta
  • Alpha relies more on stockholders equity than debt for financing
• 31. Use the information provided relating market price per share and earnings per share for four companies to answer the following questions.

Market price Earnings per share

Allied Services $6.00 $0.20

Cairns Corp. 120.00 10.00

Lucida Corp. 30.00 2.00

Redmond, Inc. 10.00 0.60

Which company has the lowest PE ratio?

• • allied
  • Cairo
  • Lucida
  • Redmond
• 32. Use the information provided relating market price per share and earnings per share for four companies to answer the following questions.

Market price Earnings per share

Allied Services $6.00 $0.20

Cairns Corp. 120.00 10.00

Lucida Corp. 30.00 2.00

Redmond, Inc. 10.00 0.60

Which company is most likely to be classified as a growth stock?

• • allied
  • Cairo
  • Lucida
  • Redmond
• 33. Discontinued operations are not expected to persist into future periods.
  • true
  • false