Current Attempt in Progress Shown below is the liabilities and stockholders equity section of the balance sheet for Sandhill Company and Teal Company Each has assets totaling $4,453,000 Sandhill Co TealCo Current liabilities $295,000 Current liabilities $895,000 Long term debt, 11 1,210,000 Common stock ($20 par) 2,810,000 Common stock ($20 par) 2,200,000 Retained earnings (Cash dividends, $332,000) 748,000 Retained earnings (Cash dividends, $225,000) 748,000 $4,453,000 $4,453,000 For the year, each company has earned the same income before interest and taxes Sandhill Co Teal Co Income before interest and taxes $1,190,000 $1,190,000 Interest expense 133,100 0 1,056,900 1,190,000 Income taxes (20 ) 211,380 238,000 Net income $845,520 $952,000 At year end, the market price of Sandhills stock was $101 per share, and Teals was $63 50 Assume balance sheet amounts are representative for the entire year (a) Calculate the return on total assets (Round answers to 2 decimal places, e g 16 85 ) Return on total assets Sandhill Company Teal Company Which company is more profitable in terms of return on total assets Sandhill CompanyTeal Company (b) Calculate the return on common stock equity (Round answers to 2 decimal places, e g 16 85 ) Return on common stock equity Sandhill Company Teal Company Which company is more profitable in terms of return on common stockholders equity Sandhill CompanyTeal Company (c) Calculate the Net income per share (Round answers to 2 decimal places, e g $6 85 ) Net income per share Sandhill Company $ Teal Company $ Which company has the greater net income per share of stock Neither company issued or reacquired shares during the year Sandhill CompanyTeal Company (d1) From the point of view of net income, is it advantageous to the stockholders of Sandhill Co to have the long term debt outstanding NoYes (e) What is the book value per share for each company (Round answers to 2 decimal places, e g $6 85 ) Book value per share Sandhill Company $ Teal Company $

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Current Attempt in Progress Shown below is the liabilities and stockholders equity section of the balance sheet for Sandhill Company and Teal Company. Each has

Current Attempt in Progress

Shown below is the liabilities and stockholders equity section of the balance sheet for Sandhill Company and Teal Company. Each has assets totaling $4,453,000.

Sandhill Co.		TealCo.
Current liabilities	$295,000	Current liabilities	$895,000
Long-term debt, 11%	1,210,000	Common stock ($20 par)	2,810,000
Common stock ($20 par)	2,200,000	Retained earnings (Cash dividends, $332,000)	748,000
Retained earnings (Cash dividends, $225,000)	748,000
	$4,453,000		$4,453,000

For the year, each company has earned the same income before interest and taxes.

	Sandhill Co.	Teal Co.
Income before interest and taxes	$1,190,000	$1,190,000
Interest expense	133,100	0
	1,056,900	1,190,000
Income taxes (20%)	211,380	238,000
Net income	$845,520	$952,000

At year-end, the market price of Sandhills stock was $101 per share, and Teals was $63.50. Assume balance sheet amounts are representative for the entire year. (a) Calculate the return on total assets? (Round answers to 2 decimal places, e.g. 16.85%.)

	Return on total assets
Sandhill Company		%
Teal Company		%

Which company is more profitable in terms of return on total assets? Sandhill CompanyTeal Company (b) Calculate the return on common stock equity? (Round answers to 2 decimal places, e.g. 16.85%.)

	Return on common stock equity
Sandhill Company		%
Teal Company		%

Which company is more profitable in terms of return on common stockholders equity? Sandhill CompanyTeal Company (c) Calculate the Net income per share. (Round answers to 2 decimal places, e.g. $6.85.)

		Net income per share
Sandhill Company		$
Teal Company		$

Which company has the greater net income per share of stock? Neither company issued or reacquired shares during the year. Sandhill CompanyTeal Company (d1) From the point of view of net income, is it advantageous to the stockholders of Sandhill Co. to have the long-term debt outstanding? NoYes (e) What is the book value per share for each company? (Round answers to 2 decimal places, e.g. $6.85.)