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Certain information from the financial records of Companies Z and A are presented below for the year ended December 31. The two companies are in the same industry. Included in the shareholders' equity of Company Z is $ 75,000 of cumulative preferred shares with a 5% annual dividend entitlement ($ 3,750 per year).
Instructions
a) Calculate the following for each company:
(i) Profit margin
(ii) Return on equity to common shareholders
b) Calculate the following for each company:
(i) Earnings per share
(ii) Price-earnings ratio
c) Based on the ratios calculated in part
c), which company's investors appear to be more optimistic about the future of the company? Explain your answer by reference to the ratios calculated.
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Jokes that are vulgar or indecent in nature, often dealing with sexual matters in a way that is meant to be funny but can be offensive.
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The branch of psychology that applies psychological theories and principles to organizations and the workplace.
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