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question 67

Multiple Choice

[The following information applies to the questions displayed below.]
Shown below are selected data from the financial statements of Supreme Co.Dollar amounts are in millions (except for the per share data) .
Supreme reported earnings per share for the year of $4 and paid cash dividends of $1 per share.At year-end,the Wall Street Journal listed Supreme's capital stock as trading at $88 per share.
-200 What was Supreme's operating income (in millions) ?

• A)$710
• B)$390
• C)$270
• D)$520

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Definitions:

Bond Premium

The extra amount by which a bond's market price exceeds its face value.

Annual Interest Expense

The total amount of interest payments a company owes over the course of a year on any borrowed funds.

Premium On Bonds Payable

The excess amount by which bonds are sold over their face value, indicating investors’ willingness to pay more for certain bonds.

Bond Interest Expense

Bond interest expense is the cost incurred by an issuer of bonds for paying interest to the bondholders, typically recognized in the income statement.