The King Mattress Company Had the Following Operating Results for 2009-2010.In

question 7

Multiple Choice

The King Mattress Company had the following operating results for 2009-2010.In addition,the company paid dividends in both 2009 and 2010 of $60,000 per year and made capital expenditures in both years of $30,000 per year.The company's stock price in 2009 was $8 and $7 in 2010.The industry average earnings multiple for the mattress industry was 9 in 2010 and the free cash flow and sales multiples were 18 and 1.5,respectively.The company is publicly owned and has 1,200,000 shares of outstanding stock at the end of 2010.
Return on assets for 2010 is:

• A)9.2%
• B)16.4%
• C)13.7%
• D)19.2% $180,000/[($2,020,000 + 1,900,000)/2] = 9.2%

---

Definitions:

Personal Construct Theory

A psychological theory positing that individuals organize their experiences through a set of personal constructs, which are used to predict and control events.

Psychoanalysis

Psychoanalysis is a therapeutic method and theory of psychological disorders, originating by Sigmund Freud, which emphasizes unconscious motivations and conflicts.

Classical Conditioning

A learning process that occurs when two stimuli are repeatedly paired together; a response that is at first elicited by the second stimulus is eventually elicited by the first stimulus alone.

Role Construct Repertory

A psychological tool developed by George Kelly, used to assess how individuals construe significant people in their lives.