Question
Schulman and partners most recent net income was $390,000, and it has 360,000 shares outstanding. If Schulman would like to maintain a dividend payout ratio
Schulman and partners most recent net income was $390,000, and it has 360,000 shares outstanding. If Schulman would like to maintain a dividend payout ratio of 0.3, what dividend per share should Schulman declare?
Hogan Corp.'s sales last year were $900,000, its operating costs were $200,000. If Hogans interest charges were $80,000, what was the company's times interest earned (TIE) ratio?
Linaweaver Bank has an ROA of 0.07% and a D/A ratio of 0.60. What is Linaweavers ROE?
The equity multiplier, EM, is 1/(1-D/A) where D/A is the debt to assets ratio. ROE = ROA*EM. Which statements are true with regards to banks and the equity multiplier? More than one statement can be correct.
| Banks commonly have a D/A of around 90% resulting in an EM of 10 |
| A high equity multiplier can result in a high probability of bankruptcy. |
| The higher the EM the more stable the company. |
| Most companies have a much lower EM than banks. |
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