Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

In 2021, Ajax Ltd. completed a very successful year with an increase in its net income of over 20%. Most of this increase occurred because

In 2021, Ajax Ltd. completed a very successful year with an increase in its net income of over 20%. Most of this increase occurred because a new manufacturing plant was built almost exclusively through the use of borrowed funds. To conserve cash for further expansion, the board of directors increased the dividend in 2021 by only 3%. Because of this, the companys share price rose by only 6% in that year. (a) What ratio increased the most in 2021: return on assets or return on common shareholders equity? Why? (b) Did the payout, price-earnings, and dividend yield ratios increase or decrease in 2021? Why? Calculate impact of other comprehensive income on profit margin.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Analytical Finance Volume I

Authors: Jan R. M. Röman

1st Edition

3319340263, 978-3319340265

More Books

Students also viewed these Finance questions

Question

Find Io in the circuit shown using nodal analysis. 4 6 8KL2 4

Answered: 1 week ago

Question

mple 10. Determine d dx S 0 t dt.

Answered: 1 week ago

Question

6. Have you used solid reasoning in your argument?

Answered: 1 week ago