# Chap 16 quiz w - Chap 16 Quiz 2 Student 1 An increase in the market price of a company's common stock will immediately affect its A dividend yield

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Chap 16 Quiz 2 Student: ___________________________________________________________________________ 1. An increase in the market price of a company's common stock will immediately affect its: A. dividend yield ratio. B. debt-to-equity ratio. C. earnings per share of common stock. D. dividend payout ratio. 2. If a company has a high current ratio but a low acid-test ratio, one can conclude that: A. the company has a large outstanding accounts receivable balance. B. the company has a large investment in inventory. C. the company has a large amount of current liabilities. D. the company's financial leverage is very high. 3. Which of the following accounts would be included in the calculation of the acid-test ratio? A. Choice A B. Choice B C. Choice C D. Choice D 4. VIM Company purchased \$100,000 in inventory from its suppliers on credit terms. The company's acid-test ratio would most likely: A. increase. B. decrease. C. be unchanged. D. impossible to determine without more information.

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5. Craston Company's net income last year was \$70,000. The company paid preferred dividends of \$10,000 and its average common stockholders' equity was \$480,000. The company's return on common stockholders' equity for the year was closest to: A. 12.5% B. 14.6% C. 16.7% D. 2.1% 6. The following data have been taken from your company's financial records for the current year: The price-earnings ratio is: A. 1.67 B. 15.0 C. 9.0 D. 7.0 7. Bracken Company's net income last year was \$85,000 and its interest expense was \$10,000. Total assets at
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## This note was uploaded on 01/13/2012 for the course IS 3020 taught by Professor Staff during the Spring '08 term at Kennesaw.

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Chap 16 quiz w - Chap 16 Quiz 2 Student 1 An increase in the market price of a company's common stock will immediately affect its A dividend yield

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