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Exercise 15-19 Shown below is the liabilities and stockholders' equity section of the balance sheet for Monty Company and Flounder Company. Each has assets totaling $4,105,000 Monty Co. FlounderCo. Current liabilities Long-term debt, 9% Common stock ($20 par) Retained earnings (Cash dividends, $222,000) $384,000 3,070,000 1,890,000 Retained eanings (Cash dividends, $355,000) 651,000 $324,000 Current liabilities 1,240,000 Common stock ($20 par) 651,000 $4,105,000 $4,105,000 For the year, each company has earned the same income before interest and taxes. Monty Co Flounder Co. Income before interest and taxes $1,280,000 $1,280,000 111,600 1,168,400 25,780 $642,620 Interest expense 1,280,000 576,000 $704,000 Income taxes (45%) Net income At year end, the market price of Monty's stock was $101 per share, and Flounder's was $63.50. Assume balance sheet amounts are representative for the entire year (a) Calculate the return on total assets? (Round answers to 2 decimal places, eg, 16.85%.) Return on total assets Monty Company Flounder Company Which company is more profitable in terms of return on total assets? (b) Calculate the return on common stock equity? (Round answers to 2 decimal places, e.g. 16.8590.) Return on conmon stock equity Monty Company 9% Flounder Company Which company is more profitable in terms of return on common stockholders equity? (c) Calculate the Net income per share. (Round answers to 2 decimal places, e.g. $6.85.) Net income per share Monty Company lounder Company Which company has the greater net income per share of stock? Neither company issued or reacquired shares during the year (d1) From the point of view of net income, is it advantageous to the stockholders of Monty Co. to have the long-term debt outstanding? (e) What is the book value per share for each company? (Round ansvers to 2 decimal places, e.g. $6.85.) Book value per share Monty Company Flounder Company Question Attempts: 0 of 3 used

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