Question

1. Sally Company has EBIT of $10M, debt at the beginning of the year of $29M and at the end of the year of $31M, equity at the beginning of the year of $24M and at the end of the year $26M. The president of Sally Co bought herself a Ferrari for $.5M. What is its Return on Invested Capital (RIOC)? See Ch 01 Lecture 3 for a hint.

2. Lyle, Inc. has Net Income of $6M, common equity at the beginning of the year was $17M and at the end of the year was $19M. What is its Return on Equity (ROE). You know where to look for a hint.

3. Roscoe, Inc. has Net Income of $24M, Assets at the beginning of the year were $148M and at the end of the year $152M. What is its Return on Assets (ROA)?

4. Nancy, Inc. paid $.40 in dividends last quarter. Her current stock price is $30. What is her Implied Dividend Yield?

Answer 1