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Normal financial statement relationships

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Reference no: EM133272855

Question : Dividends

WhyKnot, a necktie retailer, is consistently profitable. Its normal financial statement relationships are as follows: Return on Common Equity (ROCE) 24.5% Return on Assets (ROA) 13.6% Liabilities to equity ratio 0.8 WhyKnot is considering declaring and paying a dividend to common shareholders of $0.43 per share during the current year. Holding all else equal, would the dividend INCREASE / DECREASE / HAVE NO EFFECT on the following profitability ratios:

a. Basic Earnings Per Share (EPS)

Circle one: INCREASE DECREASE NO EFFECT Not enough Information

b. Return on Common Equity (ROCE)

Circle one: INCREASE DECREASE NO EFFECT Not enough Information

c. Return on Assets (ROA),

Circle one: INCREASE DECREASE NO EFFECT Not enough Information

Reference no: EM133272855

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