Exercise 15-19 Shown below is the liabilities and stockholders equity section of the balance sheet for Sandhill Company and Teal Company. Each has assets totaling $4,250,000. Sandhill Co. TealCo. Current liabilities $302,000 Current liabilities $592,000 Long-term debt, 11% 1,230,000 Common stock ($20 par) 2,900,000 Common stock ($20 par) 1,960,000 Retained earnings (Cash dividends, $326,000) 758,000 Retained earnings (Cash dividends, $209,000) 758,000 $4,250,000 $4,250,000 For the year, each company has earned the same income before interest and taxes. Sandhill Co. Teal Co. Income before interest and taxes $1,300,000 $1,300,000 Interest expense 135,300 0 1,164,700 1,300,000 Income taxes (45%) 524,115 585,000 Net income $640,585 $715,000 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? (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? (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. (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? (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 $