You Have the Following Information About a Firm: Total Asset

question 6

Multiple Choice

You have the following information about a firm: total asset = $350,000; common stock equity = $175,000; ROE = 12.5%.What is the firm's earnings available for common stockholders?

• A) $43,750
• B) $21,875
• C) $50,000
• D) $47,632

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Definitions:

Per Se

By itself; inherently, referring to something that is taken as a given and needs no additional proof.

Res Ipsa Loquitur

A doctrine that allows the judge or jury to infer that, more likely than not, the defendant’s negligence was the cause of the plaintiff’s harm, even though there is no direct evidence of the defendant’s lack of due care.

Federal Laws

Statutes and regulations enacted by the United States Congress and signed into law by the President.

State Laws

Regionally-specific legal frameworks enacted by individual states within a country, governing aspects not covered by federal law.