The United States normally purchases more goods from foreign countries than it sells. It is clear that the United States has a:
a. trade surplus
b. favorable balance of trade
c. comparative advantage
d. positive balance of payments
e. trade deficit
e. trade deficit
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The statement of stockholders' equity
a. is one of the required financial statements for the annual report, when changes have occurred in the stockholders' equity accounts. b. shows the changes in retained earnings for the period, which includes the increase or decrease as a result of net income or loss for the period, and dividends for the period. c. includes accounts, such as the retained earnings and common stock accounts, but not changes to the retained earnings account, since those items are reported on the statement of retained earnings. d. is used only if a corporation frequently issues common stock.
At the beginning of the year, Sigma Company's balance sheet reported Total Assets of $231,000 and Total Liabilities of $17,800 and Total Paid-in capital of $71,200. During the year, the company reported total revenues of $270,000 and expenses of $209,000. Also, dividends during the year totaled $56,000. Assuming no other changes to Retained earnings, the balance in the Retained earnings account at the end of the year would be:
A. $200,000. B. $147,000. C. $230,000. D. $141,000. E. $144,000.
Mullins, Inc manufactures furniture. Mullins has given you its most recent annual report in an effort to obtain a sizeable loan. The company is very profitable and appears to have a strong financial position. However, based on a news report you saw on television last night, you are aware that Mullins is a defendant in a class action lawsuit related to defective products. Serious injuries were
allegedly caused by Mullins' infant high chairs overturning. The television news report is an example of financial information that is: A) predictable. B) conservative. C) relevant. D) comparable.
Lance Inc.'s free cash flow was just $1.00 million. If the expected long-run growth rate for this company is 5.4%, if the weighted average cost of capital is 11.4%, Lance has $4 million in short-term investments and $3 million in debt, and 1 million shares outstanding, what is the intrinsic stock price?
A. $17.28 B. $17.70 C. $18.13 D. $18.57 E. $19.01