The Following Information Pertains to Diane Company Liabilities and Stockholders' Equity

question 111

Multiple Choice

The following information pertains to Diane Company. Assume that all balance sheet amounts represent both average and ending balance figures and that all sales were on credit.
Assets
$\begin{array}{lr}\text { Cash and short-term investments } & \$ 30,000 \\\text { Accounts receivable (net) } & 20,000 \\\text { Inventory } & 15,000 \\\text { Property, plant, and equipment } & 185,000 \\\text { Total assets } & \$ 250,000\end{array}$ Liabilities and Stockholders' Equity
$\begin{array}{lr}\text { Current liabilities } & \$ 45,000 \\\text { Long-term liabilities } & 70,000 \\\text { Common stock } & 80,000 \\\text { Retained earnings } & 55,000 \\\text { Total liabilities and stockhol ders' equity } & \$ 250,000\end{array}$ Income Statement
$\begin{array}{lr}\text { Sales } & \$ 85,000 \\\text { Cost of goods sold } & 45,000 \\\text { Gross margin } & \$ 40,000 \\\text { Operating expenses } & (15,000) \\\text { Interest expense } & (5,000) \\\text { Net income } & \$ 20,000\end{array}$
$$\begin{array} { l r } \text { Number of shares of common stock outstanding } & 6,000 \\\text { Market price of common stock } & \$ 20 \\\text { Total dividends paid } & \$ 9,000 \\\text { Cash provided by operations } & \$ 30,000\end{array}$$
-What is the dividend yield for Diane Company?

Comprehend the applicability of performance objectives in both quantifiable and non-quantifiable job aspects.

Understand the principles and processes involved in Management by Objectives (MBO).

Know the benefits of participatory planning in the organizational context.

Identify the steps involved in the planning process and their significance.

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Definitions:

Long-Run Profits

Long-run profits are the earnings a firm expects to achieve over a period during which all inputs, including capital, can be fully adjusted.

Elastic

Describes a situation where the demand or supply for a good or service significantly changes in response to changes in price.

Pure Competition

A market structure characterized by a large number of buyers and sellers, uniform products, and free entry and exit, leading to price taking behaviour.

Excess Capacity

A situation where a firm is producing at a level less than its potential maximum output, indicating underutilization of resources.