Porter Industries Inc. began 2018 with total stockholders’ equity of $40 million. Due to a large...

Porter Industries Inc. began 2018 with total stockholders’ equity of $40 million. Due to a large acquisition of treasury stock and the payment of a $10 million cash dividend, the company ended that year with stockholders’ equity of only $5 million. For the year ended December 31, 2018, Porter reported net income of $10 million. What is the company's return on equity?

10%
2.25%
44.4%
Not enough information to determine

Solutions

Expert Solution

The correct answer is 44.44 %

Calculation

Return on equity

= net income / average stockholders equity*100

= (10 / ((40+5)/2))*100

= (10/22.5)*100

= 44.44 %

Thus the correct answer return on equity = 44.44 %

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

At the end of 2013, Daimler AG reported stockholders’ equity of $43,363 million and total assets...

At the end of 2013, Daimler AG reported stockholders’ equity of $43,363 million and total assets of $168,618 million. Its stockholders’ equity at the end of 2012 was $39,330 million. Net income in 2013 was $8,720 million. a. Calculate Daimler’s return on equity for 2013 b. Calculate Daimlers’ debt to equity ratio as of December 31, 2013

Tony Corporation began operations on January 1, 2018. The following transactions relating to stockholders’ equity occurred...

Tony Corporation began operations on January 1, 2018. The following transactions relating to stockholders’ equity occurred in the first two years of the company’s operations. 2018 Jan. 1 Authorized the issuance of 2 million shares of $5 par value common stock and 100,000 shares of $100 par value, 10% cumulative, preferred stock. Jan. 2 Issued 200,000 shares of common stock for $12 cash per share. Jan. 3 Issued 100,000 shares of common stock in exchange for a building valued at...

The following information is from 2019 statement of stockholders' equity for Katy Inc. Stockholders' equity (in...

The following information is from 2019 statement of stockholders' equity for Katy Inc. Stockholders' equity (in millions, except shares) 2016 2015 Series A 5.375% mandatory convertible preferred stock $ 400 $ 400 Common stock, par value $0.01 (128,626,740 shares issued 2019; 128,228,477 shares issued 2018) 1 1 Additional paid-in capital 3,547 3,187 Accumulated other comprehensive income, net of tax 21 19 Accumulated deficit (1,927 ) (686 ) Total Dynegy stockholders' equity 2,042 2,921 Noncontrolling interest (3 ) (2 ) Total...

Coronado Inc. has retained earnings of $780000 and total stockholders’ equity of $2100000. It has 302000...

Coronado Inc. has retained earnings of $780000 and total stockholders’ equity of $2100000. It has 302000 shares of $5 par value common stock outstanding, which is currently selling for $30 per share. If Coronado declares a 10% stock dividend on its common stock: net income will decrease by $151000. retained earnings will decrease by $151000 and total stockholders’ equity will increase by $151000. retained earnings will decrease by $906000 and total paid-in capital will increase by $906000. retained earnings will...

Statement of Stockholders' Equity The stockholders’ equity T accounts of I-Cards Inc. for the fiscal year...

Statement of Stockholders' Equity The stockholders’ equity T accounts of I-Cards Inc. for the fiscal year ended December 31, 20Y9, are as follows. COMMON STOCK Jan. 1 Balance 900,000 Apr. 14 Issued 9,600 shares 384,000 Dec. 31 Balance 1,284,000 PAID-IN CAPITAL IN EXCESS OF PAR Jan. 1 Balance 144,000 Apr. 14 Issued 9,600 shares 76,800 Dec. 31 Balance 220,800 TREASURY STOCK Aug. 7 Purchased 1,600 shares 59,200 RETAINED EARNINGS Mar. 31 Dividend 23,000 Jan. 1 Balance 1,570,000 June. 30 Dividend...

Arnold Industries has pretax accounting income of $40 million for the year ended December 31, 2018....

Arnold Industries has pretax accounting income of $40 million for the year ended December 31, 2018. The tax rate is 40%. The only difference between accounting income and taxable income relates to an operating lease in which Arnold is the lessee. The inception of the lease was December 28, 2018. An $20 million advance rent payment at the inception of the lease is tax-deductible in 2018 but, for financial reporting purposes, represents prepaid rent expense to be recognized equally over...

Sora Industries has 6060 million outstanding shares, $ 120$120 million in debt, $ 40$40 million in...

Sora Industries has 6060 million outstanding shares, $ 120$120 million in debt, $ 40$40 million in cash, and the following projected free cash flow for the next four years: Year 0 1 2 3 4 Earnings and FCF Forecast ($ million) 1 Sales 433.0 468.0 516.0 547.0 574.3 2 Growth vs. Prior Year 8.1% 10.3% 6.0% 5.0% 3 Cost of Goods Sold (313.6) (345.7) (366.5) (384.8) 4 Gross Profit 154.4 170.3 180.5 189.5 5 Selling, General, & Admin. (93.6) (103.2)...

STATEMENT OF STOCKHOLDERS' EQUITY In its most recent financial statements, Newhouse Inc. reported $60 million of...

STATEMENT OF STOCKHOLDERS' EQUITY In its most recent financial statements, Newhouse Inc. reported $60 million of net income and $840 million of retained earnings. The previous retained earnings were $790 million. How much in dividends were paid to shareholders during the year? Assume that all dividends declared were actually paid.

MAJOR LEAGUE APPAREL Balance Sheet (Stockholders' Equity Section) December 31, 2018 Stockholders' equity: Preferred stock $570,000...

MAJOR LEAGUE APPAREL Balance Sheet (Stockholders' Equity Section) December 31, 2018 Stockholders' equity: Preferred stock $570,000 Common stock 110,000 Additional paid in capital 7,401,500 Total paid-in capital 8,081,500 Retained earnings Treasury stock Total stockholders' equity $8,081,500 Date General Journal Debit Credit December 01, 2018 Dividends Dividends payable Major League Apparel has two classes of stock authorized: 6%, $10 par preferred, and $1 par value common. The following transactions affect stockholders’ equity during 2018, its first year of operations: January 2...

1 A company began the year with Assets of $200,000, Liabilities of $40,000 and Stockholders' equity...

1 A company began the year with Assets of $200,000, Liabilities of $40,000 and Stockholders' equity of $160,000. During the year Assets increased $110,000 and stockholders' equity increased $50,000. What was the change in Liabilities for the year? Answer__________________ .2 At the end of last year, the company's assets totaled $1,720,000 and its liabilities totaled $1,480,000. During the current year, the company's total assets increased by $120,000 and its total liabilities increased by $48,000. At the end of the current...

Subjects