Pettijohn Inc.The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.

Balance Sheet (Millions of $) Assets2016
Cash and securities$  1,554.0
Accounts receivable9,660.0
Inventories  13,440.0
Total current assets$24,654.0
Net plant and equipment  17,346.0
Total assets$42,000.0
Liabilities and Equity Accounts payable$  7,980.0
Notes payable5,880.0
Accruals    4,620.0
Total current liabilities$18,480.0
Long-term bonds  10,920.0
Total liabilities$29,400.0
Common stock3,360.0
Retained earnings    9,240.0
Total common equity$12,600.0
Total liabilities and equity$42,000.0
  Income Statement (Millions of $)2016
Net sales$58,800.0
Operating costs except depr'n$55,274.0
Depreciation$  1,029.0
Earnings bef int and taxes (EBIT)$  2,497.0
Less interest    1,050.0
Earnings before taxes (EBT)$  1,447.0
Taxes$     314.0
Net income$  1,133.0
Other data: Shares outstanding (millions)175.00
Common dividends$   509.83
Int rate on notes payable & L-T bonds6.25%
Federal plus state income tax rate21.7%
Year-end stock price$77.69

Refer to the data for Pettijohn Inc. What is the firm's BEP?

A. 5.37%
B. 5.65%
C. 5.95%
D. 6.24%
E. 6.55%


Answer: C

Business

You might also like to view...

Clothing maker Patagonia states that its purpose as an organization is to "build the best product, cause no unnecessary harm, [and] use business to inspire and implement solutions to the environmental crisis." This is the company's

A. mission statement. B. belief statement. C. goals pact. D. code of ethics. E. management pledge.

Business

Define a trait based system.

What will be an ideal response?

Business

Which of these statements regarding Regal Marine is TRUE?

A) Product design is a critical decision for the firm. B) Regal uses a three-dimensional CAD system to shorten product development time. C) Regal still uses some wooden parts and hand-produces some components. D) Regal's use of CAD has resulted in a superior product. E) All of the above are true.

Business

A person can be found negligent even though his failure to perform some act was unintentional

Indicate whether the statement is true or false

Business