53.000 Quiz #1 - Chapters 1-3 Question 1 (40 marks) Benson Inc. had the following results for their operations last year. Operating income $ 229,000 Interest expense 25.000 Operating expenses 263.000 Preferred dividends paid 26.000 Common dividends paid $ Tax Rate 27% Number of common shares outstanding 25.000 Opening Retained Earnings Balance 72.000 Share price 63 a) Calculate the earnings per share (EPS) and the common dividend per share for Benson Inc. b) What was the payout ratio? What is the retained earnings balance at year end? . What is its price-camnings ratio PE? Question 2 (30 marks) Assume the following data for Interactive Technology and Silicon Softwar: Interactive Silicon Softwear Technology (55 Net Income 5 58.000 Total Sales (80are on account 5 187.000 $ 1.036.000 Average AR Balance 5 242.000 Total debt $ 60.000 $ 200.000 Shareholders equity 5 112.000 $ 165.000 Required a) Calculate the following ratios for each company Receivables Tumower Return on shareholders equity Debt to total assets b) For each of the ratios above, indicate which company has the better resul Question 9 (1 point) Maximization of shareholder wealth is a concept in which 1) increased cash flows are of primary importance. 2) increased earnings are of primary importance. 3) increased share price is of primary importance. 4) increased dividends are of primary importance. RI hp Quiz #1 - Chapters 1 - 3 Question 1 (40 marks) Benson Inc. had the following results for their operations last year: Operating income $ 229,000 Interest expense $ 25,000 Operating expenses 263,000 Preferred dividends paid 26,000 Common dividends paid $ 53,000 Tax Rate 27% Number of common shares outstanding 26,000 Opening Retained Earnings Balance 72.000 Share price 63 a) Calculate the earnings per share (EPS) and the common dividend per share for Benson Inc. $ b) What was the payout ratio? c) What is the retained earnings balance at year end? d) What is its price-earnings ratio (P/E)? Question 2 (30 marks) Assume the following data for Interactive Technology and Silicon Softwear. Interactive Silicon Softwear Technology (IT) (SS) Net Income 33,000 $ 58.000 Total Sales (80% are on account) 187,000 $ 1.036.000 Average A/R Balance 30,000 $ 242.000 Total debt $ 60,000 $ 296,000 Shareholders' equity 112,000 $ 165,000 Required a) Calculate the following ratios for each company: Receivables Turnover Return on shareholders' equity Debt to total assets ooooo b) For each of the ratios above, indicate which company has the better result