FINC3131 Business Finance Summer 2009
The primary goal for a publicly traded firm’s financial managers is:
To maximize the dividends per share paid out to shareholders
To maximize preferred dividends
To maximize the stock price.
To maximize the net profit of the current year
To smooth the firm’s earnings so they are positive and always growing
Jennings, Inc. reported the total dividends paid of $6,379,100 for the fiscal year ending
December 31, 2006. If Jennings reported Retained earnings of $43,886,600 for 2005 and
Retained earnings of $46,920,100 for 2006, what net income did Jennings report in their 2006
None of the above is within $1,000 of the correct answer
Which of the following represents an Investing cash outflow?
increase in holdings of stocks of other companies
A decrease in Accounts payable
A decrease in Gross property, plant and equipment
A decrease in Accumulated depreciation
Both a and c
If a firm's net profit margin is 5%, its total asset turnover ratio is 1.5 times, and its debt-to-
equity ratio is 0.25, what is its return on equity (ROE)?
Debt to equity ratio is 0.25, so Debt ratio =0.2
You are given the following data in 2006 financial report for ARC Inc: operating income was
$50,400, net income was $32,000, net sale was $60,000, total asset was $ 420,000. What was the
net profit margin in 2006?
- 1 -