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Coca-Cola recently paid a $3.00 dividend. Investors expect a 12 percent return on this stock. What is the difference in price if Coca-Cola is expected to grow at 7 percent versus 8 percent?


A) $11.40
B) $16.80
C) $21.60
D) $19.40

E) None of the above
F) B) and D)

Correct Answer

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ABC has a net profit margin of 4.3 percent on sales of $12,000,000. The firm has 250,000 shares outstanding. If the firm's P/E is 16 times, how much is the stock selling for?


A) $41.72
B) $35.96
C) $25.40
D) $33.02

E) A) and B)
F) A) and C)

Correct Answer

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A stock is expected to pay a $4.00 dividend per share. The growth rate is expected to be 5 percent. If investors demand 10 percent on this stock, what is the expected price of the stock 10 years from now?


A) $94.68
B) $92.17
C) $130.31
D) $126.93

E) C) and D)
F) All of the above

Correct Answer

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At your discount brokerage firm, it costs $10.50 per stock trade. How much money do you need to buy 100 shares of Apple (AAPL) , which trades at $202.64?


A) $20,253.50
B) $20,264.00
C) $20,274.50
D) $21,314.00

E) A) and B)
F) C) and D)

Correct Answer

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At your discount brokerage firm, it costs $8.50 per stock trade. How much money do you need to buy 200 shares of Apple (AAPL) , which trades at $171.54?


A) $32,608.00
B) $34,299.50
C) $34,316.50
D) $36,008.00

E) B) and D)
F) A) and D)

Correct Answer

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Which of the following is incorrect with respect to limit orders?


A) They can be used only to buy stock.
B) If the current quote does not meet the price cited in the limit order, the trade is not executed.
C) The advantage of the limit order is that the investor makes the trade at the desired price.
D) The disadvantage of the limit order is that the trade might not be executed at all.

E) A) and D)
F) B) and C)

Correct Answer

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ABC has a net profit margin of 3.3 percent on sales of $10,000,000. The firm has 50,000 shares outstanding. If the firm's P/E is 19 times, how much is the stock selling for?


A) $41.72
B) $34.96
C) $125.40
D) $99.16

E) A) and C)
F) C) and D)

Correct Answer

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Sally has researched GLE and wants to pay no more than $50 for the stock. Currently, GLE is trading in the market for $54. Sally would be best served to


A) buy using a limit order.
B) buy using a market order.
C) use the bid-ask spread to her advantage.
D) None of the options.

E) B) and C)
F) A) and D)

Correct Answer

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We often use the P/E ratio model with the firm's growth rate to estimate


A) required rates of return.
B) inflation.
C) a stock's current price.
D) a stock's future price.

E) None of the above
F) A) and B)

Correct Answer

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You would like to buy shares of Nokia (NOK) . The current bid and ask quotes are $20.13 and $20.15, respectively. You place a market buy-order for 300 shares that executes at these quoted prices. How much money did it cost to buy these shares?


A) $6.00
B) $6,039.00
C) $6,045.00
D) $12,084.00

E) A) and D)
F) B) and D)

Correct Answer

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JPM has earnings per share of $3.75 and P/E of 47. What is the stock price?


A) $174.08
B) $176.25
C) $185.95
D) $112.98

E) A) and B)
F) A) and C)

Correct Answer

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International Business Machines (IBM) has earnings per share of $6.85 and a P/E ratio of 15.19. What is the stock price?


A) $0.45
B) $2.22
C) $45.09
D) $104.05

E) B) and C)
F) None of the above

Correct Answer

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You would like to buy shares of International Business Machines (IBM) . The current bid and ask quotes are $103.25 and $103.30, respectively. You place a market buy-order for 200 shares that executes at these quoted prices. How much money did it cost to buy these shares?


A) $10,330.00
B) $20,650.00
C) $20,660.00
D) None of these choices are correct.

E) None of the above
F) B) and D)

Correct Answer

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A firm is expected to pay a dividend of $2.00 next year and $3.75 the following year. Financial analysts believe the stock will be at their price target of $125.00 in two years. Compute the value of this stock with a required rate of return of 15 percent.


A) $78.34
B) $81.05
C) $87.13
D) $99.09

E) A) and B)
F) B) and D)

Correct Answer

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Suppose that a firm's recent earnings per share and dividend per share are $2.50 and $1.00, respectively. Both are expected to grow at 5 percent. However, the firm's current P/E ratio of 23 seems high for this growth rate. The P/E ratio is expected to fall to 19 within five years. Compute a value for this stock. Assume a 10 percent required rate.


A) $36.19
B) $38.86
C) $40.31
D) $42.00

E) A) and B)
F) All of the above

Correct Answer

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GEN has 10 million shares outstanding and a stock price of $89.25. What is GEN's market capitalization?


A) $89,250,000,000
B) $89,250,000
C) $892,500,000
D) $892,500

E) A) and B)
F) A) and C)

Correct Answer

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A firm's recent dividend was $4.00 per share. The stock is selling in the market place for $55.00 per share. If investors are demanding 12 percent on this stock, what is this stock's growth rate?


A) 4.73 percent
B) 4.41 percent
C) 5.91 percent
D) 6.14 percent

E) B) and C)
F) A) and B)

Correct Answer

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Showing 101 - 117 of 117

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