You Have the Following Data for the Fosberg Winery of St

question 408

Multiple Choice

You have the following data for the Fosberg Winery of St Catherines. What is Fosberg's return on assets (ROA) ? Return on equity = 15%; Earnings before taxes = $30,000; Total asset turnover = 0.80; Profit margin = 4.5%; Tax rate = 35%.

• A) 3.6%
• B) 3.9%
• C) 5.7%
• D) 6.4%
• E) 9.3%

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Definitions:

Board Of Directors

A group of individuals elected by shareholders to oversee the management and make strategic decisions for a corporation.

Proxy

The right to act for another on a specific issue. In finance the right to cast another’s vote in the election of corporate directors. Incumbent directors routinely solicit stockholders’ proxies for reelection.

Voting Rights

The rights possessed by shareholders that allow them to vote on matters of corporate policy, including decisions on the composition of the board of directors.

Market Return

The total return from an investment or portfolio, including dividends and capital gains, as compared to the overall market.