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Question 4 The following information pertains to Cashe Company. Assume that all balance sheet amounts represent both average and ending balance...


Question 4

The following information pertains to Cashe Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit.

Assets

Cash and short-term investments

$40,000

Accounts receivable (net)

30,000

Inventory

25,000

Property, plant and equipment

215,000

Total Assets

$310,000







Liabilities and Stockholders' Equity

Current liabilities

$60,000

Long-term liabilities

75,000

Stockholders' equity-common

175,000

Total Liabilities and Stockholders' Equity

$310,000







Income Statement

Sales

$90,000

Cost of goods sold

45,000

Gross margin

45,000

Operating expenses

25,000

Net income

$20,000







Number of shares of common stock

5,000

Market price of common stock

$22

Dividends per share

1.00


What is the return on common stockholders’ equity for Cache?



22.9%



25.7%



8.6%



11.4%

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