QUESTION SOLUTION
1. A company has 6,000 shares of common stock outstanding; total common stockholders' equity is $1,500,000. The book value per share of common stock is $ ___.
a. 250
b. 300
c. 400
d. 6,000
2. The liabilities of a company at the end of the year are $700,000, and the total stockholders' equity at the end of the year is $1,400,000. The ratio of liabilities to stockholders' equity is ___.
a. .33 to 1
b. .5 to 1
c. .67 to 1
d. 2 to 1
3. The net income of the company for the current year ended is $230,000. Income tax is $190,000 & interest expense is $20,000. The times interest earned ratio is ___.
a. .9
b. 3.0
c. 21.0
d. 22.0
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