The Following Information Pertains to Unique Company What Is the Return on Common Stockholders' Equity for This

question 45

Multiple Choice

The following information pertains to Unique Company. Assume that all balance sheet amounts represent both average and ending balance figures. Assume that all sales were on credit. $\begin{array}{lr}\text { Assets }\\\text { Cash and short-term investments } & \$ 40,000 \\\text { Accounts receivable (net) } & 30,000 \\\text { Inventory } & 20,000 \\\text { Property, plant and equipment } & 210,000 \\\text { Total Assets } & \$ 300,000 \\\\\text { Liabilities and Stockholders' Equity }\\\text { Current liabilities } & \$ 60,000 \\\text { Long-term liabilities } & 90,000 \\\text { Stockholders' equity-common } & 150,000 \\\text { Total Liabilities and Stockholders' Equity } & \$ 300,000\end{array}$ $$\begin{array} { l r } { \text { Income Statement } } & \\\text { Sales revenue } & \$ 90,000 \\\text { Cost of goods sold } & 45,000 \\\text { Gross margin } & 45,000 \\\text { Operating expenses } & 20,000 \\\text { Net income } & \$ 25,000 \\& \\\text { Number of shares of common stock } & 6,000 \\\text { Market price of common stock } & \$ 20 \\\text { Dividends per share on common stock } & 0.90 \\\text { Cash provided by operations } & \$ 30,000\end{array}$$ What is the return on common stockholders' equity for this company?

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Definitions:

Critical Value

A threshold in hypothesis testing that defines the boundary or cutoff for deciding whether to reject the null hypothesis, based on the observed data.

Significance Level

The probability threshold below which the null hypothesis is rejected in a statistical test.

P Value

The probability of obtaining test results at least as extreme as the results actually observed during the test, assuming that the null hypothesis is correct.

Type II Error

Occurs when a false null hypothesis is not rejected, indicating a failure to detect an effect or difference when one actually exists.