From the information presented in Table 4-6, calculate the following ratios for the Springfield Power Co.
i. current ratio
ii. acid test ratio
iii. average collection period
iv. inventory turnover
v. gross profit margin
vi. operating profit margin
vii. net profit margin
viii. total asset turnover
Question 2
The risk-free rate of interest is 4 and the market risk premium is 9. Howard Corporation has a
beta of 2.0, and last year generated a return of 16 with a standard deviation of returns of 27. The
required return on Howard Corporation stock is
A) 22. B) 34. C) 36. D) 26.