Assume That All Balance Sheet Amounts for Marley Company Represent

question 188

Multiple Choice

Assume that all balance sheet amounts for Marley Company represent average balance figures. $$\begin{array} { l r } \text { Stockholders' equity-common } & \$ 150,000 \\\text { Total stockholders' equity } & 200,000 \\\text { Sales } & 100,000 \\\text { Net income } & 29,000 \\\text { Number of shares of common stock } & 10,000 \\\text { Common stock dividends } & 10,000 \\\text { Preferred stock dividends } & 4,000\end{array}$$ What is the return on common stockholders' equity for Marley?

• A) 19.3%
• B) 16.7%
• C) 12.5%
• D) 10.0%

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Definitions:

Capital

Financial assets or the value of financial assets used for the creation of goods or services or for investing.

Pledging

The act of providing an asset as security or collateral for a loan, ensuring the lender can claim the asset if the loan is not repaid.

Receivables

Money owed to a company by its clients or customers for goods or services provided on credit.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered but not yet paid for, considered an asset on the balance sheet.