Goldilochs Inc

question 7

Multiple Choice

Goldilochs Inc. reported sales of $8 million and net income of $1.5 million. The firm has $12 million in total assets and $500,000 in current liabilities. The firm currently pays out 25 percent of its net income to shareholders. Assume that all assets and current liabilities are expected to grow with sales. If Goldilochs does not want to rely on any external sources of funds, what is the most sales can grow (in percent) ?

• A) 11.13 percent
• B) 10.84 percent
• C) 10.28 percent
• D) 9.69 percent

Recognize the components and importance of the statement of changes in equity.

Calculate book value per share and understand its significance.

Distinguish between dividend yield and dividend payout ratio.

Understand the accounting for share transactions including issuance and share dividends.

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Definitions:

Pay Discrimination

Inequitable compensation among employees that is often based on gender, race, age, disability, or other protected characteristics rather than job performance or qualifications.

Substantially Equal

Describes items or quantities that are nearly identical in value, size, or importance, within a reasonable degree of variation.

Implied Employment Contracts

These are employment agreements not explicitly stated but inferred from actions, circumstances, or oral statements by the employer or employee, suggesting a mutual understanding or expectation regarding the employment relationship.

Reasonable Expectations

A legal standard used to assess what an average person might anticipate in a given set of circumstances.