At the moment, Charter Enterprises is entirely funded by equity and has assets worth $1 million. It's thinking about altering its capital structure. Calculate the debt and equity balances that would exist if the company switched to the following debt ratios: 10%, 20%, 30%, 40%, 50%, 60%, and 90%. (Note: The total number of assets would remain the same.) Does the debt ratio have a maximum value?

Determine the financial statement on which the item below appears. Use I for income statement. E for statement of owner's equity, and B for balance sheet.
 Depreciation Expense

Which of the following groups of accounts BOTH normally have a debit balance?

A. Assets and Liabilities
B. Liabilities and Owner's equity
C. Revenues and Expenses
D. Assets and Expenses

This period, Amadeus Co. purchased its only available-for sale investment in the notes of Bach Co. for $83,000. The period-end fair value of these notes is$84,500. Amadeus records a

a. Credit to Unrealized Gain-Equity for $1,500.

b. Debit to Unrealized Loss-Equity for$1,500.

c. Debit to Investment Revenue for $1,500.

d. Credit to Fair Value Adjustment- Available-for-Sale for$3,500.

e. Credit to Cash for $1,500.

This period, Amadeus Co. purchased its only available-for-sale investment in the notes of Bach Co. for $83,000. The period-end fair value of these notes is$84,500. Amadeus records a

• a. Credit to Unrealized Gain—Equity for $1,500.
• b. Debit to Unrealized Loss—Equity for$1,500.
• c. Debit to Investment Revenue for $1,500.
• d. Credit to Fair Value Adjustment—Available-for-Sale for$3,500.
• e. Credit to Cash for $1,500.

In early $2015$, Abercrombie & Fitch (ANF) had a book equity of $\$ 1390$ million, a price per share of $\$ 25.52$, and $69.35$ million shares outstanding. At the same time, The Gap (GPS) had a book equity of $\$ 2983$ million, a share price of $\$ 41.19$, and $421$ million shares outstanding.

a. What is the market-to-book ratio of each of these clothing retailers?

b. What conclusions can you draw by comparing the two ratios?

a. Return on assets, or ROA, can be expressed as the product of two ratios. Which two?\

b. Return on equity, or ROE, can be expressed as the product of three ratios. Which three?

The following information was taken from Sigmund Company's balance sheet:

$$\begin{array}{lr}\text { Fixed assets (net) } & \$ 1,050,000 \\ \text { Long-term liabilities } & 750,000 \\ \text { Total liabilities } & 850,000 \\ \text { Total stockholders' equity } & 500,000\end{array}$$

Determine the company's (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to stockholders' equity. Round to one decimal place.

The following information was taken from Charu Company’s balance sheet:

$$\begin{array}{llr} \text{Fixed assets (net)}&\text{\$2,000,000}\\ \text{Long-term liabilities}&\text{800,000}\\ \text{Total liabilities}&\text{1,000,000}\\ \text{Total stockholders’ equity}&\text{625,000}\\ \end{array}$$

Determine the company’s (a) ratio of fixed assets to long-term liabilities and (b) ratio of liabilities to stockholders’ equity.

a. Show that the logistic function $f(x)=\frac{N}{1+A b^{-x}}$ can be written in the form $f(x)=\frac{N b^{x}}{A+b^{x}}$. b. Use the result of part (a) and a suitable substitution to show that $\int \frac{N}{1+A b^{-x}} d x=\frac{N \ln \left(A+b^{x}\right)}{\ln b}+C$. The rate of graduation of private high school students in the United States for the period 1994-2008 was approximately $r(t)=220+\frac{110}{1+3.8(1.27)^{-t}}$ thousand students per year $(0 \leq t \leq 14)$ t years since 1994. Use the result of part (b) to estimate the total number of private high school graduates over the period 2000-2008.

Patton Paints Corporation has a target capital structure of $40 \%$ debt and $60 \%$ common equity, with no preferred stock. Its before-tax cost of debt is $12 \%$, and its marginal tax rate is $40 \%$. The current stock price is $\mathrm{P}_0=\$ 22.50$. The last dividend was $\mathrm{D}_0=\$ 2.00$, and it is expected to grow at a $7 \%$ constant rate. What is its cost of common equity and its WACC?

A vacant lot acquired for $100,000 is sold for$350,000 in cash. What is the effect of the sale on the total amount of the seller’s (1) assets, (2) liabilities, and (3) owner’s equity?

Assume the following relationships for the Caulder Corp.: $$ \begin{matrix} \text{Sales/Total assets} & \text{1.3 }{\times}\\ \text{Return on assets (ROA)} & \text{4.0\\%}\\ \text{Return on equity (ROE)} & \text{8.0\\%}\\ \end{matrix} $$ Calculate Caulder’s profit margin and debt-to-capital ratio assuming the firm uses only debt and common equity, so total assets equal total invested capital.

Stock dividend: Firm Columbia Paper has the following stockholders' equity account. The firm's common stock has a current market price of $30 per share.

Preferred stock	$100,000
Common stock ( 10,000 shares at $2 par)	20,000
Paid-in capital in excess of par	280,000
Retained earnings	100,000
Total stockholders' equity	$500,000

a. Show the effects on Columbia of a 5% stock dividend.