Melrose Corporation's Books Revealed the Following Data for the Current

question 4

Multiple Choice

Melrose Corporation's books revealed the following data for the current year:
Net income $50,000
Retained earnings $750,000
Common shares, January 1 25,000 shares
Common shares, December 31 30,000 shares
The earnings per share is:

• A)$30.00
• B)$2.00
• C)$1.82
• D)$1.67

---

Definitions:

Return On Assets

A measure of how effectively a company uses its assets to generate profit, calculated as net income divided by total assets.

Return On Equity

A measure of the profitability of a business in relation to the equity, calculated by dividing net income by shareholders' equity.

Profit Margin

A financial metric used to assess a company's profitability by comparing net income to sales. It's often expressed as a percentage indicating how much of each dollar in sales a company keeps as profit.

Equity Multiplier

A ratio of financial leverage showing the portion of a company's assets financed through shareholders' equity.