Question
1. Consider the following per share information for a company: after-tax earnings 3 dividend 1 book value 20 price 30 Which of the following is
1. Consider the following per share information for a company: after-tax earnings 3 dividend 1 book value 20 price 30 Which of the following is a false statement?
a) the stock's dividend yield is 3.33%
b) the company's ROE is 10%
c) the ratio of market value to book value is 1.5
d) the P/E ratio is 10
e) a) & c)
2. XYZ currently has 100,000 shares outstanding with a market price-per-share of $75. Its book value-per-share is $50. Tomorrow it issues 10,000 new shares at the close of trading, but it sells them at $74/share. Compared to today, its:
a) market value-per-share is higher, book value-per-share is lower
b) market value-pre share is higher, book value-per-share is higher
c) market value-pre share is lower, book value-per-share is lower
d) market value-pre share is lower, book value-per-share is higher
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