The Rate of Return on Stockholders’ Equity?

The Rate of Return on Stockholders’ Equity?

Order ID	53003233773
Type	Essay
Writer Level	Masters
Style	APA
Sources/References	4
Perfect Number of Pages to Order	5-10 Pages

Description/Paper Instructions

The Rate of Return on Stockholders’ Equity?

1. You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would lower the calculated value of the investment?
2. The cash flows are in the form of a deferred annuity, and they total to $100,000. You learn that the annuity lasts for only 5 rather than 10 years, hence that each payment is for $20,000 rather than for $10,000.
3. The discount rate increases.
4. The riskiness of the investment’s cash flows decreases.
5. The total amount of cash flows remains the same, but more of the cash flows are received in the earlier years and less are received in the later years.
6. The discount rate decreases.

 

2. You plan to analyze the value of a potential investment by calculating the sum of the present values of its expected cash flows. Which of the following would increases the calculated value of the investment?
3. The cash flows are in the form of a deferred annuity, and they total to $100,000. You learn that the annuity lasts for only10 rather than 5 years, hence that each payment is for $10,000 rather than for $20,000.
4. The discount rate decreases.
5. The riskiness of the investment’s cash flows increases.
6. The total amount of cash flows remains the same, but more of the cash flows are received in the later years and less are received in the earlier years.
7. The discount rate increases.

 

3. Your bank account pays a 6% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT?
4. The periodic rate of interest is 1.5% and the effective rate of interest is 3%.
5. The periodic rate of interest is 6% and the effective rate of interest is greater than 6%.
6. The periodic rate of interest is 1.5% and the effective rate of interest is greater than 6%.
7. The periodic rate of interest is 3% and the effective rate of interest is 6%.
8. The periodic rate of interest is 6% and the effective rate of interest is also 6%.

 

4. Your bank account pays an 8% nominal rate of interest. The interest is compounded quarterly. Which of the following statements is CORRECT?
5. The periodic rate of interest is 2% and the effective rate of interest is 4%.
6. The periodic rate of interest is 8% and the effective rate of interest is greater than 8%.
7. The periodic rate of interest is 4% and the effective rate of interest is less than 8%.
8. The periodic rate of interest is 2% and the effective rate of interest is greater than 8%.
9. The periodic rate of interest is 8% and the effective rate of interest is also 8%.

 

1. What are the rate of return on stockholders’ equity and the rate of return on common stockholders’

equity (rounded to the nearest one-tenth of a percent) given the following information:

Net Income $350,000

Preferred Dividends 20,000

Common Stock 48,000

Common Stockholders’ Equity 1/1/2011 4,400,000

Total Stockholders’ Equity 1/1/2011 5,300,000

End of exam

Total Stockholders’ Equity 12/31/2011 5,500,000

7. Return on Stockholders’ Equity: 7.8 %; Return on Common Stockholders’ Equity: 8.9%
8. Return on Stockholders’ Equity: 5.6 %; Return on Common Stockholders’ Equity: 6.7%
9. Return on Stockholders’ Equity: 8.1 %; Return on Common Stockholders’ Equity: 9.2%
10. Return on Stockholders’ Equity: 6.5 %; Return on Common Stockholders’ Equity: 7.6%

 

2. What is the rate of return on equity if net income is $22,700; preferred dividends are $3,000; sales are $100,000; and average common stockholders’ equity is $86,000?
3. 22.7%
4. 26.4%
5. 22.9%
6. 86.0%

 

3. Birch issued 200 shares of $12 par common stock in exchange for a piece of equipment with a current market value of $3,000. Which of the following is not part of the journal entry for this transaction?
4. Crediting paid-in capital in excess of par common for $600
5. Crediting common stock for $3,000
6. Crediting common stock for $2,400
7. Debiting equipment for $3,000

 

4. What is the rate of return on common stockholders’ equity if sales are $100,000, net income is $22,700,

and average common stockholders’ equity is $86,000?

86. 86.0%
87. The rate of return can’t be determined from the information given.
88. 22.7%
89. 26.4%

The Rate of Return on Stockholders’ Equity?

RUBRIC QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points:  Student failed to submit the final paper. 20 points out of 50:  The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50:  The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately.  Elements of the required response may also be lacking. 40 points out of 50:  The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples.  The answer is complete. 50 points:  The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples.  No aspects of the required answer are missing. 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And/or there is a significant use of highly questionable sources. 15 out 20 points:  Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented.  APA 6th Edition is used with only a few minor errors.  There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points:  Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented.  APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. 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The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper.
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