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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
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(Trading on the Equity Analysis) Presented below is information from the annual report of Potter Plastics, Inc.
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|
Operating income |
$ 532,150 |
|
Bond interest expense |
135,000 |
| Â |
397,150 |
|
Income taxes |
183,432 |
|
Net income |
$ 213,718 |
|
Bonds payable |
$1,500,000 |
|
Common stock |
875,000 |
|
Retained earnings |
575,000 |
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Instructions
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(a) Compute the return on common stock equity and the rate of interest paid on bonds.
(b) Is Potter Plastics, Inc. trading on the equity successfully? Explain
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