Below Is the Common Equity Section (In Millions)

question 34

Multiple Choice

Below is the common equity section (in millions)

2009
2008

Common stock
$2,000
$1,000

Retained earnings
2,000
2,340

Total common equity
$4,000
$3,340

Teweles has never paid a dividend to its common stockholders.Which of the following statements is CORRECT?

• A)The company's net income in 2009 was higher than in 2008.
• B)Teweles issued common stock in 2009.
• C)The market price of Teweles' stock doubled in 2009.
• D)Teweles had positive net income in both 2008 and 2009, but the company's net income in 2009 was lower than it was in 2008.
• E)The company has more equity than debt on its balance sheet.

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Definitions:

Profitability Of Receivables

This term refers to the efficiency with which a company can convert its accounts receivable into cash over a specific period, indicating how well it manages credit it extends to customers.

Liquidity Ratios

Measures that indicate a company's ability to meet its short-term debt obligations.

Long Period Of Time

A duration that extends over a considerable number of years, often used to refer to investments, strategic planning, or long-term goals.

Statement Of Income

Also known as the income statement, it's a financial report that shows a company's revenues, expenses, and profits over a specific period.