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Exercises 817 -10-19 (L041 Comparison of Alternative forms of Financing) Shown below is the liabilities and stockholders' equity Section of the balance sheet for Jana Kingston Company and Mary Ann Benson Company. Each has assets totaling $4,200,000. Jana Kingston Co. Mary Ann Benson Co. Current liabilities $ 300,000 Current liabilities $ 600,000 Long-term debt, 10% 1,200,000 Common stock ($20 par) 2,900,000 - 0.000 Common stock ($20 par) 2,000,000 Retained earnings (Cash Retained earnings (Cash dividends, $328,000) 700,000 dividends, $220,000) 700,000 $4,200,000 S4,200,000 For the year, each company has earned the same income before interest and taxes. Income before interest and taxes Interest expense Mary Ann Benson Co. $1,200,000 Jana Kingston Co. $1,200,000 120,000 1,080,000 486,000 $ 594,000 Income taxes (45%) Net income 1,200,000 540,000 $ 660,000 At year end, the market price of Kingston's stock was $101 per share, and Benson's was $63.50. Instructions (a) Which company is more profitable in terms of return on total assets? (b) Which company is more profitable in terms of return on common stockholders' equity? (c) Which company has the greater net income per share of stock? Neither company issued or reacquired shares during the (d) From the point of view of net income, is it advantageous to the stockholders of Jana Kingston Co. to have the long- debt outstanding? Why? (e) What is the book value per share for each company? Homenat Formulas Data Review ViewHelp DrawPage Layout Calibri 11A 0. Tort A - Breton Chapter 15 int Acetyl Homework Template for Soda POF 10 Creator Search . E Normal $ % 9 Conditional Formats Check Cell E xplana Formatting Table 3 Copy roma Painter Wrap Test erge Center - Rad M kercise E15-19 Comparison of Alternative Forms of Financing. Page 817 w your computations using excel formulas. Please for your spelling MNL00 which company is more probable in terms of return on total jana Kingston company For maryann besonco. 1300.000 (1-0.45) 4200 000 1300.000 (1-15) / 4200 000 015714 0.13714 01571 0.1571 ok the income which is the correct for which is reference in Chapter 11 and in Chapter 24 Since this homines befo re h e was not been the chapter or in Chapter 11 and 2 would like to know w ako o b ce has a tas wachs both was equal probable which company is more problem s of u ncommon stockholder's equity For an into company 994.000.000.000 100 000 For marry a benne 000000000 0.22 01833 a which may has the compared 10 orang 44500-011000000130 0000 15000