Eddy Corporation had net credit sales during the year of $800,000 and cost of goods sold of $500,000. The balance in receivables at the beginning of the year was $100,000 and at the end of the year was $150,000. What was the receivables turnover ratio?

(a) 6.4

(b) 8.0

(c) 5.3

(d) 4.0

Suppose a bank receives a deposit of $10,000. It holds $2,500 as reserves and lends out the remaining $7,500. What is the reserve ratio?

During the year ended December 31, 2012, Bjornstad Corporation had the following results: Sales revenue $267,000; cost of goods sold $107,000; net income $92,400; operating expenses $55,400; net cash provided by operating activities $108,950. What was the company’s profit margin ratio?

a) 40%

b) 60%

c) 20.5%

d) 34.6%

ABC Corp. just paid a dividend of $1.55 per share and plans to maintain a constant 3.2% dividend growth rate indefinitely. Today’s stock price is $28.17. What is the dividend yield and the required return on this stock?

A) Dividend yield is 5.68%; required return is 8.88%.

B) Dividend yield is 5.50%; required return is 8.70%.

C) Dividend yield is 3.20%; required return is 6.40%.

D) Dividend yield is 3.20%; required return is 8.88%.

Fama’s Llamas has a weighted average cost of capital of 11 percent. The company’s cost of equity is 15 percent, and its pretax cost of debt is 7.5 percent. The tax rate is 32 percent. What is the company’s target debt-equity ratio?

a) 0.678

b) 0.7119

c) 0.7051

d) 1.1429

e) 0.6441