All I need for this part of the paper is part E

Question description

DECISION MAKING ACROSS THE ORGANIZATIONBYP11-7 In recent years the fast-food chain Wendy’s International has purchased manytreasury shares. From January 3, 1999, to December 30,2001, the number of shares outstandinghas fallen from 124 million to 105 million. The followinginformation was drawnfrom the company’s financial statements (in millions).Year endedDec. 30, 2001 Jan. 3, 1999Net income $ 193.6 $ 123.4Total assets 2,076.0 1,837.9Average total assets 2,016.9 1,889.8Total common stockholders’ equity 1,029.8 1,068.1Average common stockholders’ equity 1,078.0 1,126.2Total liabilities 1,046.3 769.9Average total liabilities 939.0 763.7Interest expense 30.2 19.8Income taxes 113.7 84.3Cash provided by operations 305.2 233.8Cash dividends paid on common stock 26.8 31.0Preferred stock dividends 0 0Average number of common shares outstanding 109.7 119.9InstructionsUse the information provided to answer the followingquestions.(a) Computeearnings per share, return on common stockholders’ equity, and returnon assets for both years. Discuss the change in thecompany’s profitability over thisperiod.(b) Computethe dividend payout ratio. Also compute the average cash dividend paid pershare of common stock (dividends paid divided by theaverage number of commonshares outstanding). Discuss any change in these ratiosduring this period and theimplications for the company’s dividend policy.(c) Computethe debt to total assets ratio and interest coverage ratio. Discuss the changein the company’s solvency.(d) Basedon your findings in (a) and (c), discuss to what extent any change in thereturn on common stockholders’ equity was the result ofincreased reliance ondebt.(e) Dothe purchase of treasury stock and the shift toward more reliance on debtappearto have been wise strategic moves?