Exhibit 6-1 Morgan Company Reported the Following Information for the Year

question 75

Multiple Choice

Exhibit 6-1 Morgan Company reported the following information for the year ended December 31, 2010:
$\begin{array}{ll}\text { Net income } & \$ 800,000 \\\text { Preferred dividends declared and paid } & 100,000 \\\text { Common dividends declared and paid } & 160,000 \\\text { Average common shares outstanding } & 140,000 \\\text { Ending market price per share } & 30 \\\text { Net sales } & 7,400,000\end{array}$
- Refer to Exhibit 6-1.Morgan's 2010 dividend yield was

• A)2.4%
• B)3.8%
• C)6.9%
• D)114%

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Definitions:

Fixed Selling Expenses

Fixed selling expenses are those costs associated with selling a product that do not change with the level of production or sales, such as salary of sales staff and rent for office space.

Administrative Expenses

Administrative expenses are the costs associated with the general administration of a business, such as salaries of office staff, utilities, and rent.

Schedule of Expected Cash Collections

A detailed projection of the amounts and timing of cash inflows from receivables anticipated to be collected.

Merchandise Purchases Budget

A financial plan that outlines the expected purchases of merchandise inventory over a certain period, considering anticipated sales and desired inventory levels.