Chapter $4-$ Assignments

SHOW ALL WORK

Strack Houseware Supplies Inc. has $$866$ million in total assets. The other side of its balance sheet consists of $$95\mathrm{.}26$ million in current liabilities, $$251\mathrm{.}14$ million in long$-$term debt, and $$519\mathrm{.}60$ million in common equity. The company has $16,100,000$ shares of common stock outstanding, and its stock price is $$59$ per share. What is Strack's market$-$to$-$book ratio?

a$.,9\mathrm{.}63$

b$.,8\mathrm{.}81$

c$.,1\mathrm{.}67$

d$.,1\mathrm{.}83$

e$.,1\mathrm{.}37$

The Wilson Corporation has the following relationships: Sales$/$Total assets $=3$; Return on assets $(ROA)=15\%$; Return on equity $(ROE)=17\%.$ What is Wilson's profit margin?

a$.,7\mathrm{.}16\%$

b$.,5\mathrm{.}67\%$

c$.5\mathrm{.}00\%$

d$.,8\mathrm{.}89\%$

e$.4\mathrm{.}66\%$

Last year YYY Company had a $5\mathrm{.}00\%$ net profit margin based on $$21,000,000$ in sales and $$14,000,000$ of total assets. During the coming year, the president has set a goal of attaining a $8\%$ return on total assets. If YYY finances $56\%$ of its assets by borrowing, what will its return on common equity be next year if the return on assets goal is achieved?

a$.,19\mathrm{.}95\%$

b$.14\mathrm{.}29\%$

c$.16\mathrm{.}02\%$

d$.18\mathrm{.}18\%$

e$.12\mathrm{.}82\%$

U KNO, Inc. uses only debt and common equity funds to finance its assets. This past year the firm's return on total assets was $19\%.$ The firm financed $30\%$ percent of its assets using debt. What was the firm's return on common equity?

a$.24\mathrm{.}36\%$

b$.63\mathrm{.}33\%$

c$.47\mathrm{.}26\%$

d$.,69\mathrm{.}50\%$