A Company Had $9,000,000 in Net Income for the Year

question 53

Multiple Choice

A company had $9,000,000 in net income for the year. Its net sales were $13,200,000 for the same period. Calculate its profit margin.

• A) 17.5%.
• B) 28.0%.
• C) 62.5%.
• D) 160.0%.
• E) 68.2%

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Definitions:

Dividend

a distribution of a portion of a company's earnings to its shareholders, usually in cash or additional shares.

Convertible Preferred Stock

Preferred stock that gives the owner the option of converting those preferred shares into a stated number of common shares.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation, giving voting rights and a share in the profits.

Par Value

Par Value is the face value of a bond or the stock value stated in the corporate charter, below which shares cannot be issued.