Carefree Company provides the following selected financial information for Year 2000: Sales $17,633 Net Income...
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Carefree Company provides the following selected financial information for Year 2000: Sales $17,633 Net Income $405 Interest expense before taxes $245 Preferred stock dividend $27 Tax rate 35% Average total assets $17917.5 Average preferred equity $348 Average common equity $5901.5 (a) Calculate the ROA for Year 2000. (b) Calculate the ROCE for Year 2000. (c) Calculate the amount of net income to common shareholders derived from the excess return on creditors' capital, the excess return on preferred shareholders' capital, and the return on common shareholders' capital. (d) Did debt work to the advantage of the common shareholders in Year 2000? How about preferred stock, did it work to the advantage of the common shareholders in Year 2000
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