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Activity Participation Monday Dec 27th 1. Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to
Activity Participation Monday Dec 27th 1. Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits. 2. Suppose you own stock in a company. The current price per share is $25. Another company has just announced that it wants to buy your company and will pay $35 per share to acquire all the outstanding stock. Your company's management immediately begins fighting off this hostile bid. Is management acting in the shareholders' best interests? Why or why not? 3. Why might the revenue and cost figures shown on a standard income statement not be representative of the actual cash inflows and outflows that occurred during a period? 4. Natare, Inc., has sales of $742,000, costs of $316,000, depreciation expense of $39,000, interest expense of $34,000, and a tax rate of 21 percent. What is the net income for this firm? 5. Suppose Natare, Inc., paid out $125,000 in cash dividends. What is the addition to retained carnings? 6. Suppose Natare, Inc., had 75,000 shares of common stock outstanding. What is the earnings per share, or EPS, figure? What is the dividends per share figure
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