Settles Corporation Has Provided the Following Financial Data

question 7

Multiple Choice

Settles Corporation has provided the following financial data:
Dividends on common stock during Year 2 totaled $5,400. The market price of common stock at the end of Year 2 was $5.89 per share.
-The company's return on equity for Year 2 is closest to:

• A) 3.31%
• B) 8.50%
• C) 5.09%
• D) 50.52%

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Definitions:

IRR

The Internal Rate of Return is a financial indicator utilized to evaluate the potential returns of investments.

Bid Price

The highest price that a buyer is willing to pay for a security.

Scenario Analysis

A process of analyzing possible future events by considering alternative possible outcomes (scenarios), often for the purpose of planning through uncertainty.

Sensitivity Analysis

Analyzes how different values of an independent variable affect a particular dependent variable under a given set of assumptions.