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Question 7.10 Multigrain Health Foods Inc. is authorized to issue 5,000,000 common shares. In its initial public offering during 2010, Multigrain issued 500,000 common shares

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Question 7.10 Multigrain Health Foods Inc. is authorized to issue 5,000,000 common shares. In its initial public offering during 2010, Multigrain issued 500,000 common shares for $7.00 per share. Over the next year, Multigrain's share price increased and the company issued 400,000 more shares at an average price of $8.50 During the next seven years, from 2010 to 2016, Multigrain earned a net income of $920,000. They declared and paid cash dividends of $140,000. A 10% stock dividend was distributed to the shareholders in 2016 on the shares outstanding. The market price was $8.00 per share when the stock dividend was distributed. On December 31, 2016, the company has total assets of $14,500,000 and total liabilities of $6,820,000. 1. Show the computation of Multigrain's total shareholders' equity at December 31, 2016. 2. Present a detailed computation of each element of shareholder's equity. Question 7.9 1. Given the following information for Victory Stables, calculate their return on assets and equity and comment on the use of these ratios (why would we use them? what do they tell us?). Net income $50,000 Interest expense 8,500 Income tax expense 15,250 Preferred dividends 2,500

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