Below is the common equity section (in millions)The firm has never paid a dividend to its common stockholders. Which of the following statements is CORRECT?
A) The company's net income in 2012 was higher than in 2011.
B) The firm issued common stock in 2012.
C) The market price of the firm's stock doubled in 2012.
D) The firm had positive net income in both 2011 and 2012, but its net income in 2012 was lower than it was in 2011.
E) The company has more equity than debt on its balance sheet.

Question

Quizplus · Accepted Answer

The fact that there is a common equity section implies that the firm has issued common stock in the past. The statement does not provide any information on the firm's net income or the market price of the stock. It also does not provide enough information to determine whether the company has more equity than debt on its balance sheet.

Below Is the Common Equity Section (In Millions)The Firm Has