Q1P - statement purposes is the same and therefore there is...

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BUSINESS 312, Day Section: QUIZ NAME ______________________________ Student Number__________________________ Instructions: Open book and open notes. Work independently. Hand-in no additional sheets of paper; use the back of this quiz if you need more space. If you would like your quiz returned, use pen rather than pencil. Show your work for full marks. No washroom breaks during the examination period. The following information is available on the financial accounts of ABC Corporation. 2009 EBITDA 2,942 Depreciation 300 Interest ? 2008 2009 Trade Capital ? ? Short-Term Debt ? ? Net Fixed Assets ? ? Equity 4,800 ? Invested Capital ? ? NOTES: "Equity" represents the sum of all of the accounting equity accounts (that is, share- capital plus retained earnings). You can presume that depreciation for tax and for financial
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Unformatted text preview: statement purposes is the same, and therefore, there is no deferred income tax or future income tax liability in this problem (i.e., capital cost allowance is the same as financial statement depreciation). ABC repaid $350 of their short-term debt during 2009. The increase in ABCs Net Fixed Assets from year-end 2008 to year-end 2009 was $400. The increase in ABCs Trade Capital from year-end 2008 to year-end 2009 was $275. ABC paid dividends to shareholders of $315.2 during 2009. ABC repurchased $50 of shares from common shareholders during 2009. ABC's tax rate is 40%. Required: What is ABCs 2009 Rate of Return on Equity using beginning of period book equity? Solution...
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