For the following 2 questions: You purchase 4500 shares of stock at a price of $11 per share. One year later, the shares are selling for $16 per share. In addition, a dividend of $2 per share is paid at the end of each year.
34) What is the capital gains yield for the investment?
A) 8.5%
B) 10.0%
C) 31.5%
D) 33.0%
E) 45.5%
35) What is the dividend yield for the investment?
A) 2.5%
B) 13.3%
C) 16.5%
D) 18.2%
36) Company J and Company K each recently reported the same earnings per share (EPS). Company J's stock, however, trades at a higher price. Which of the following statements is most correct?
A) Company J must have a higher P/E ratio.
B) Company J must have a higher market to book ratio.
C) Company J must be riskier.
D) Company J must have fewer growth opportunities.
E) All of the statements above are correct.
37) Calculate the NPV and IRR of the following project using a discount rate of 11%:
Yr 0 = â$50
Yr 1 = $80
Yr 2 = $400
Yr 3 = $300
Yr 4 = $500
Yr 5 = $90000
$70,173; 16%
$70,173; 441%
$50,765; 18%
$54,306; 442%
The answers ar bold but i need to know how to get the answers
For the following 2 questions: You purchase 4500 shares of stock at a price of $11 per share. One year later, the shares are selling for $16 per share. In addition, a dividend of $2 per share is paid at the end of each year.
34) What is the capital gains yield for the investment?
A) 8.5%
B) 10.0%
C) 31.5%
D) 33.0%
E) 45.5%
35) What is the dividend yield for the investment?
A) 2.5%
B) 13.3%
C) 16.5%
D) 18.2%
36) Company J and Company K each recently reported the same earnings per share (EPS). Company J's stock, however, trades at a higher price. Which of the following statements is most correct?
A) Company J must have a higher P/E ratio.
B) Company J must have a higher market to book ratio.
C) Company J must be riskier.
D) Company J must have fewer growth opportunities.
E) All of the statements above are correct.
37) Calculate the NPV and IRR of the following project using a discount rate of 11%:
Yr 0 = â$50
Yr 1 = $80
Yr 2 = $400
Yr 3 = $300
Yr 4 = $500
Yr 5 = $90000
$70,173; 16%
$70,173; 441%
$50,765; 18%
$54,306; 442%
The answers ar bold but i need to know how to get the answers
Related questions
Dividends
Bowles Sporting Inc. is prepared to report the following 2012 income statement (shown in thousands of dollars).
| Sales | $10,900 |
| Operating costs including depreciation | 7,957 |
| EBIT | $2,943 |
| Interest | 363 |
| EBT | $2,580 |
| Taxes (40%) | 1,032 |
| Net income | $1,548 |
Prior to reporting this income statement, the company wants to determine its annual dividend. The company has 350,000 shares of stock outstanding, and its stock trades at $54 per share.
A. The company had a 60% dividend payout ratio in 2011. If Bowles wants to maintain this payout ratio in 2012, what will be its per-share dividend in 2012? Round your answer to the nearest cent.
$ _____
B. If the company maintains this 60% payout ratio, what will be the current dividend yield on the company's stock? Round your answer to two decimal places.
_____%
C. The company reported net income of $1.25 million in 2011. Assume that the number of shares outstanding has remained constant. What was the company's per-share dividend in 2011? Round your answer to the nearest cent.
$ _____
D. As an alternative to maintaining the same dividend payout ratio, Bowles is considering maintaining the same per-share dividend in 2012 that it paid in 2011. If it chooses this policy, what will be the company's dividend payout ratio in 2012? Round your answer to two decimal places.
% _____
E. Assume that the company is interested in dramatically expanding its operations and that this expansion will require significant amounts of capital. The company would like to avoid transactions costs involved in issuing new equity. Given this scenario, would it make more sense for the company to maintain a constant dividend payout ratio or to maintain the same per-share dividend? Selct I or II below.
I. Since the company would like to avoid transactions costs involved in issuing new equity, it would be best for the firm to maintain the same per-share dividend.
II. Since the company would like to avoid transactions costs involved in issuing new equity, it would be best for the firm to maintain a constant dividend payout ratio.
Which one of the following statements about common stock is correct?
| A. Firms tend to repurchase shares of their outstanding stock when they view the shares as undervalued. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| B. Treasury stock is a means of increasing the number of shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| C. Transaction costs cannot be expected to significantly reduce the rate of return on stock investments. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| D. Common stock gives stockholders first title to a share of the company's earnings, prior to other corporate obligations. ---- Tiffany owned 1000 shares of GIA stock which was selling for $1.50 per share when the company declared a 1 for 10 reverse split. After the split, Tiffany owned
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