A Business Reports the Following in Its Financial Statements Its 'Times Dividends Earned' Ratio Is:
A) 12

question 2

Multiple Choice

A business reports the following in its financial statements: $$\begin{array} { l r } \text { Net profit before tax } & \$ 100 \\\text { Interest expense } & 20 \\\text { Income tax expense } & 30 \\\text { Preference dividends paid } & 10 \\\text { Ordinary dividends paid } & 20 \\\text { Total assets at the beginning of the year } & 750 \\\text { Total assets at the end of the year } & 850 \\\text { Total liabilities at the beginning of the year } & 375 \\\text { Total liabilities at the end of the year } & 425\end{array}$$
Its 'times dividends earned' ratio is:

• A) 12.0 times
• B) 7.0 times
• C) 3.0 times
• D) both, or either, B and/or C

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