Question
Arch Inc. has 200,000 shares of common stock outstanding. Net income for the recently ended fiscal year was $500,000, and the stock has a price/earnings
Arch Inc. has 200,000 shares of common stock outstanding. Net income for the recently ended fiscal year was $500,000, and the stock has a price/earnings (P/E) ratio of eight. The Board of Directors has just declared a three-for-two stock split. For an investor who owns 100 shares of stock before the split, the approximate value (rounded to the nearest dollar) of the investment in Arch stock immediately after the split is:
$3,000
$2,000
$1,333
$4,000
If a company receives trade credit terms of 1/10 net 45, the effective annual rate (assuming that there are 365 days in a year) for foregoing the trade credit discount is closest to:
10.39%
10.53%
10.43%
8.11%
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