Evaluate a stock as an investment
Response to the following problem:
Evaluate the common stock of Mark Distributing Company as an investment. Specifically, use the three common stock ratios to determine whether the common stock increased or decreased in attractiveness during the past year. Round calculations and your final answer to three decimal places.
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2014
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2013
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Net income......................................................
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$ 143,000
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$ 97,000
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Dividends to common.....................................
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23,000
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19,000
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Total stockholders' equity at year-end.............
(includes 92,000 shares of common stock)
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550,000
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500,000
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Preferred stock, 6%.........................................................
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170,000
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110,000
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Market price per share of common stock at year-end...................................
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$ 17.50
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$ 12.25
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