1. "Just Tell Me What You Want To Report, an accounting firm, made a handsome profit last year. At the beginning of this year it issued additional shares and used the funds to purchase new furniture for its reception room and add laptops for staff. Suppose this year its revenue, costs (fixed, variable and financing) and taxes are exactly the same as last. What will be Just Tell Me ROE this year compared to last?

2. Group of answer choices

higher

lower

the same

depends on the issue price of the new shares

3. Which of the following would cause ABCs stock price to be higher tomorrow than today, all else the same? Choose two, 2 points each

Group of answer choices

Tomorrow investors expect a higher growth rate for ABCs future earnings than they do today

Tomorrow investors expect a lower growth rate for ABCs future earnings than they do today

Tomorrow investors assign a higher risk premium in the discount factor for ABCs future dividends

Tomorrow investors assign a lower risk premium in the discount factor for ABCs future dividends

ABCs stock price today is higher than it was yesterday

ABCs stock price today is lower than it was yesterday