Aussie Ltd Has an Investment in Yankee Inc

question 7

Multiple Choice

Aussie Ltd has an investment in Yankee Inc. The shares in Yankee were acquired on 15 August 20X4. Yankee uses the revaluation model to account for land & buildings. A building which was acquired by Yankee on 1 April 20X2 was revalued on 15 March 20X9. The exchange rate used to translate the building into the presentation currency at 30 June 20X9 is the rate that applied on:

• A) 1 April 20X2
• B) 15 August 20X4
• C) 15 March 20X9
• D) 30 June 20X9

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Definitions:

Plowback Ratio

The Plowback Ratio, also known as the retention ratio, measures the proportion of earnings that are retained by the company rather than paid out as dividends.

P/E Ratio

Price-to-Earnings Ratio, a valuation metric comparing the current share price of a company to its per-share earnings.

ROE

Return on Equity, a financial ratio that measures the profitability of a corporation in relation to stockholders' equity.

EPS

Earnings Per Share, a financial metric that divides a company's profit by the number of its shares outstanding.