SHOW STEPS

1. Foxrun Inc. has common equity of $150 million. The company's stock price is $125 per share and its market/book ratio is 5. How many shares of stock does the company have outstanding? (2 points)

2. If a firm's net profit margin is 7.25%, its total asset turnover is 2.5 times, and its debt-to-assets is 40%, what is the firm's return on equity? (2 points)

3. Draton Inc. recently reported $250,000 of sales, $120,500 of operating costs other than depreciation, and $35,250 of depreciation. The company had $20,500 of outstanding bonds that carry a 6.5% interest rate, and its federal-plus-state income tax rate was 25%. How much was the firm's net income (NI)? (2 points)