B 100 c 200 d 625 175 67 cso 2a2e los 2a2v the

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b. 1.00%. c. 2.00%. d. 6.25%.
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175 67. CSO: 2A2e LOS: 2A2v The dividend yield ratio is calculated by which one of the following methods? a. Market price per share divided by dividends per share. b. Earnings per share divided by dividends per share. c. Dividends per share divided by market price per share. d. Dividends per share divided by earnings per share. 68. CSO: 2A2e LOS: 2A2v Mayson Company reported net income of $350,000 for last year. The company had 100,000 shares of $10 par value common stock outstanding and 5,000 shares of common stock in treasury during the year. Mayson declared and paid $1 per share dividends on common stock. The market price per common share at the end of last year was $30. The company’s dividend yield for the year was a. 30.03%. b. 28.57%. c. 11.11%. d. 3.33%. 69. CSO: 2A2e LOS: 2A2v The following information concerning Arnold Company’s common stock was included in the company’s financial reports for the last two years. Year 2 Year 1 Market price per share on December 31 $60 $50 Par value per share 10 10 Earnings per share 3 3 Dividends per share 1 1 Book value per share on December 31 36 34 Arnold’s dividend yield in Year 2 a. has increased compared to Year 1. b. is indicative of the company’s failure to provide a positive return to the investors. c. is the same as Year 1. d. has declined compared to Year 1.
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176 70. CSO: 2A4a LOS: 2A4a.2 A firm’s functional currency should be a. selected on the basis of several economic factors including cash flow, sales price, and financing indicators. b. the currency of the foreign environment in which the firm primarily generates and expends cash. c. selected on the basis of cost-benefit analysis and ease of preparing consolidated financial statements. d. the currency of the parent organization as the firm operates as an extension of the parent’s operations. 71. CSO: 2A4a LOS: 2A4a.2 The functional currency of an entity is defined as the currency a. of the entity’s parent company. b. of the primary country in which the entity is physically located. c. in which the books of record are maintained for all entity operations. d. of the primary economic environment in which the entity operates. 72. CSO: 2A4c LOS: 2A4c.2 If a company uses off-balance-sheet financing, assets have been acquired a. for cash. b. with operating leases. c. with financing leases. d. with a line of credit. 73. CSO: 2A4e LOS: 2A4e The concept of economic profit is best defined as total a. revenue minus all accounting costs. b. income minus the sum of total fixed and variable costs. c. revenue minus the sum of total fixed and variable costs. d. revenue minus all explicit and implicit costs. 74. CSO: 2A4e LOS: 2A4e “Economic costs” often differ from costs shown in a firm’s financial statements. For a corporation, a major difference would arise due to a. interest costs.
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