Question
Below is the common equity section (in millions) of a companys balance sheets: 2009 2008 Common stock $2,000 $1,000 Retained earnings 2,000 2,340 Total common
Below is the common equity section (in millions) of a companys balance sheets:
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| 2009 |
| 2008 |
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Common stock |
| $2,000 |
| $1,000 |
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Retained earnings |
| 2,000 |
| 2,340 |
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Total common equity |
| $4,000 |
| $3,340 |
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This company has never paid a dividend to its common stockholders. Which of the following statements is CORRECT? |
The companys net income in 2009 was higher than in 2008.
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The market price of the companys stock doubled in 2009. | ||
The company had positive net income in both 2008 and 2009, but the companys net income in 2009 was lower than it was in 2008. | ||
The company has more equity than debt on its balance sheet. | ||
The company issued common stock in 2009. |
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