Financial Management - Study Mode

[#276] Net income available to stockholders is Rs 150 and total assets are Rs 2,100 then return on total assets would be
Correct Answer

(B) 7.14%

Explanation

Solution: Net income available to stockholders = 150 Total assets = 2100 Return on common equity rate shows the net income earned per every rupee invested.It acts as a yardstick of profitability. Return on common equity = (net income - preferential stock)/Average common stock holder's equity No further information is available = (150/2100)×100 = 7.14%

[#277] A formula such as net income available to common stockholders divided by common equity is used to calculate
Correct Answer

(C) return on common equity

Explanation

Solution: A formula such as net income available to common stockholders divided by common equity is used to calculate return on common equity. The Return on Common Equity (ROCE) ratio refers to the return that common equity investors receive on their investment.

[#278] Companies that help to set benchmarks are classified as
Correct Answer

(B) benchmark companies

Explanation

Solution: Companies that help to set benchmarks are classified as benchmark companies. Benchmarking is the practice of comparing business processes and performance metrics to industry bests and best practices from other companies.

[#279] Total assets divided common equity is a formula uses for calculating
Correct Answer

(A) equity multiplier

Explanation

Solution: Total assets divided common equity is a formula uses for calculating equity multiplier. The equity multiplier is a financial leverage ratio that measures the amount of a firm's assets that are financed by its shareholders by comparing total assets with total shareholder's equity.

[#280] An expected rate of return is subtracted from capital gains yield to calculate
Correct Answer

(A) expected dividend yield

Explanation

Solution: An expected rate of return is subtracted from capital gains yield to calculate expected dividend yield. The dividend yield is the ratio of a company's annual dividend compared to its share price.