1. High-value company usually exhibit a:
a. return on assets less than return on equity.
b. return on assets greater than return on equity.
c. return on assets equal to return on equity.
d. negative return on equity & positive return on assets.
2. ________ is the rate of return the company would earn if its total capital consisted of common stock.
a. Return on equity
b. Return on assets
c. Dividend payout
d. Capital intensity
3. Which of the following statements is false?
a. Return on equity is the rate of return for common stockholders given that a company's capital structure includes debt & (perhaps) preferred stock.
b. Return on assets measures performance relative to investing activities.
c. Return on assets measures performance relative to investing & financing activities.
d. Usually, when a company is performing well, its return on equity will be higher tan its return on assets.
4. Return on total assets is equal to
a. the price-earnings ratio times asset turnover.
b. the profit-margin percentage tomes asset turnover.
c. the profit margin percentage times receivable turnover.
d. the price-earnings ratio times dividend yield.
5. When determining the return on total assets, ________ must be added back to net income in order to isolate the ratio from the way operations are financed.
a. Income taxes
b. Preferred dividends
c. Interest expense
d. Extraordinary losses.
QUIZZERS
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