Multiple choice

1. A firm with earning per share of $5 and a price earning ratio a 15 will have a stock price of.

a. $20.00

b. $75.00

c. $3.00

d. the market assign stock price independence of EPS and the P/E ratio.

2. Reinvested funds from retained earning theoretically belong to:

a. bond holders.

b. common stockholders.

c. employees.

d.  all of the above.

3. How many of the following items are found of the balance sheet, rather than the income statement?

Account receivable 

Retained earning 

Income tax expense 

Accrued expense

Cash

Selling and administrative expense 

Plant and equipment 

Operating expense 

Marketing Securities 

Interest expense 

a. 3 of these items are found of the balance sheet.

b. 4 of these items are found of the balance sheet.

c. 5 of these items are found of the balance sheet.

d. 6 of these items are found of the balance sheet.

4. Total stockholder’s equity consist of 

a. Preferred stock and common stock.

b.  Common and stock and retained earning.

c.  Common stock and capital paid in excess  paid in excess  par.

d. Preferred stock, common stock, capital paid in excess of par and retained earning.