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 $4,504,400.

Jana Kingston Co. Mary Ann Benson Co. Current liabilities $316,600 Current liabilities $867,600 Long-term debt, 11% 1,284,000 Common stock ($20 par) 2,921,000 Common stock ($20 par) 2,188,000 Retained earnings (Cash dividends, $328,800) 715,800 Retained earnings (Cash dividends, $221,500) 715,800 $4,504,400 $4,504,400

For the year, each company has earned the same income before interest and taxes.

Jana Kingston Co. Mary Ann Benson Co. Income before interest and taxes $1,211,000 $1,211,000 Interest expense 141,240 0 1,069,760 1,211,000 Income taxes (45%) 481,392 544,950 Net income $588,368 $666,050

At year end, the market price of Kingstons stock was $101 per share, and Bensons was $63.50. Assume balance sheet amounts are representative for the entire year.

(a) Calculate the return on total assets? (Round answers to 2 decimal places, e.g. 16.85%.)

Return on total assets Kingston Company % Benson Company %

Which company is more profitable in terms of return on total assets?

(b) Calculate the return on common stock equity? (Round answers to 2 decimal places, e.g. 16.85%.)

Return on common stock equity Kingston Company % Benson Company %

Which company is more profitable in terms of return on common stock equity?

(c) Calculate the Net income per share. (Round answers to 2 decimal places, e.g. $6.85.)

Net income per share Kingston Company $ Benson Company $

Which company has the greater net income per share of stock? Neither company issued or reacquired shares during the year.

(d1) From the point of view of net income, is it advantageous to the stockholders of Jana Kingston Co. to have the long-term debt outstanding?

(e) What is the book value per share for each company? (Round answers to 2 decimal places, e.g. $6.85.)

Book value per share Kingston Company $ Benson Company $