1. The balance sheets at the end of each of the first two years of operations indicate the following:

   	2012	2011
   Total current assets	$600,000	$560,000
   Total investments	60,000	40,000
   Total property, plant, and equipment	900,000	700,000
   Total current liabilities	125,000	65,000
   Total long-term liabilities	350,000	250,000
   Preferred 9% stock, $100 par	100,000	100,000
   Common stock, $10 par	600,000	600,000
   Paid-in capital in excess of par-common stock	75,000	75,000
   Retained earnings	310,000	210,000

   If net income is $115,000 and interest expense is $30,000 for 2012, and the market price is $30, What is the price-earnings ratio on common stock for 2012 (Round intermediate calculation to two decimal place and final answers to one decimal place)?

   A.		16.9
   B.		12.1
   C.		14.4
   D.		13.3

2. The balance sheets at the end of each of the first two years of operations indicate the following:

   	2012	2011
   Total current assets	$600,000	$560,000
   Total investments	60,000	40,000
   Total property, plant, and equipment	900,000	700,000
   Total current liabilities	125,000	65,000
   Total long-term liabilities	350,000	250,000
   Preferred 9% stock, $100 par	100,000	100,000
   Common stock, $10 par	600,000	600,000
   Paid-in capital in excess of par-common stock	75,000	75,000
   Retained earnings	310,000	210,000

   If net income is $115,000 and interest expense is $30,000 for 2012, what is the rate earned on stockholders' equity for 2012 (round percent to one decimal point)?

   A.		10.6%
   B.		11.1%
   C.		12.4%
   D.		14.0%

3. The following information is available for Dorman Company:

   	2014
   Dividends per share of common stock	$ 1.44
   Market price per share of common stock	$ 24.00

   Which of the following statements is correct?

   A.

   The dividend yield is 6.0%, which is of interest to investors seeking an increase in market price of their stocks.

   B.

   The dividend yield is 6.0%, which is of special interest to investors seeking to earn revenue on their investments.

   C.

   The dividend yield is 16.7%, which is of interest to bondholders.

   D.

   The dividend yield is 16.7% which is an important measure of solvency.

   4. The balance sheets at the end of each of the first two years of operations indicate the following:

   	2012	2011
   Total current assets	$600,000	$560,000
   Total investments	60,000	40,000
   Total property, plant, and equipment	900,000	700,000
   Total current liabilities	125,000	65,000
   Total long-term liabilities	350,000	250,000
   Preferred 9% stock, $100 par	100,000	100,000
   Common stock, $10 par	600,000	600,000
   Paid-in capital in excess of par-common stock	75,000	75,000
   Retained earnings	310,000	210,000

   If net income is $115,000 and interest expense is $30,000 for 2012 what is the rate earned on total assets for 2012 (round percent to one decimal point)?

   A.		9.3%
   B.		10.1%
   C.		8.0%
   D.		7.4%