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Which one of the following is the financial statement that summarizes a
firm’s revenue and expenses over a period of time?
Statement of cash flows
Market value report
Tax reconciliation statement
Balance sheet
Income statement
Kelly’s Corner Bakery purchased a lot in Oil City six years ago at a cost
of $278000. Today, that lot has a market value of $264,000. At the time
of the purchase, the company spent $6,000 to level the lot and another
$8,000 to install storm drains. The company now wants to build a new
facility on that site. The building cost is estimated at $1.03 million. What
amount should be used as the initial cash flow for this project?
-$1,294,000
-$1,322,000
-$1,045,000
-$1,308,000
-$1,308,000
Webster United is paying a dividend of $1.32 per share today. There are
350,000 shares outstanding with a market price of $22.40 per share prior
to the dividend payment. Ignore taxes. Before the dividend, the company
had earnings per share of $1.68. As a result of this dividend, the:
Retained earnings will decrease by $350,000.
Earnings per share will increase to $3.
Total firm value will not change.
Price-earnings ratio will be 12.55.
Retained earnings will increase by $462,000.
The common stock of Dayton Repair sells for $43.19 a share. The stock
is expected to pay $2.28 per share next year when the annual dividend is
distributed. The firm has established a pattern of increasing its dividends
by 2.15 percent annually and expects to continue doing so. What is the
market rate of return on this stock?
7.67 percent
7.59 percent