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Presented below are selected data from the financial statements of Korn Corp. 



1.	Presented below are selected data from the financial statements of Korn Corp. for 2014 and 2013.

	2014	2013
Net income	$100,000	$123,000
Weighted average number of common shares outstanding	105,000	95,000
Market price per share of common stock at the end of the year	$12.00	$10.00
Earnings per share	$  2.00	$  1.83

The price-earnings ratio for 2014 is
a.	1.09.
b.	5.46.
c.	6.0.
d.	11.0.


	

	2.	Presented below are selected data from the financial statements of DeBruce Corp. for 2014 and 2013.

	2014	2013
Net income	$110,000	$123,000
Cash dividends paid on common stock 	$  42,000	$  38,000
Market price per share of common stock at the end of the year	$16.00	$13.00
Earnings per share	$  0.84	$  0.74
Shares of common stock outstanding	140,000	100,000

The dividend payout ratio for 2014 is
a.	0.382.
b.	0.05.
c.	0.28.
d.	0.50.


	

Figure 16-1.
Starbuck Corporation had net income of $250,000 and paid dividends to common stockholders of $50,000 in 2013. The weighted average number of shares outstanding in 2013 was 50,000 shares. Starbuck Corporation's common stock is selling for $40 per share on the New York Stock Exchange.

	3.	Refer to Figure 16-1. Starbuck's price-earnings ratio is
a.	2.
b.	5.
c.	10.
d.	8.


	

	4.	Refer to Figure 16-1. Starbuck's dividend payout ratio for 2013 is
a.	$5 per share.
b.	0.25.
c.	0.20.
d.	0.125.


	

	5.	Goslier Company's net income last year was $130,000. The company paid preferred dividends of $42,000 and its average common stockholders' equity was $610,000. The company's return on common stockholders' equity for the year was closest to
a.	15.8%.
b.	28.1%.
c.	21.3%.
d.	14.4%.


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