Answer to Question #12152 in Management for John

Question

Below is the common equity section (in millions) of Teweles Technology’s last two year-end balance sheets:

2009
2008

Common stock
$2,000
$1,000

Retained earnings
2,000
2,340

Total common equity
$4,000
$3,340



Teweles has never paid a dividend to its common stockholders. Which of the following statements is CORRECT?
Answer The company’s net income in 2009 was higher than in 2008.
Teweles issued common stock in 2009.
The market price of Teweles' stock doubled in 2009.
Teweles had positive net income in both 2008 and 2009, but the company’s net income in 2009 was lower than it was in 2008.
The company has more equity than debt on its balance sheet.