Chapter 11 Financial Planning Exercise 2

Assume that the following quote for Merck, a NYSE stock, appeared on August 1, 2012 (Wednesday) on Yahoo! Finance (http://finance.yahoo.com/q?s=MRK&ql=0):

Merck & Co. Inc. (MRK) - NYSE 44.56 0.39(0.88%) 1:34PM EDT Prev Close: 44.17 Day's Range: 44.25 - 44.79 Open: 44.45 52wk Range: 29.47 - 45.17 Bid: 44.62 x 6900 Volume: 5,345,943 Ask: 44.63 x 1400 Avg Vol (3m): 15,788,300 1y Target Est: 45.69 Market Cap: 135.74B Beta: 0.43 P/E (ttm) 20.44 Next Earnings Date: N/A EPS (ttm): 2.18 Div & Yield: 1.68 (3.80%)

Given this information, answer the following questions.

At what price did the stock sell at the time of the quote? $ What is the stock's price/earnings ratio? What does that indicate? Round your answers to the nearest whole number. This means that investors are willing to pay more than $ for every $1 of earnings per share that the company generated last year. What is the last price at which the stock traded on the prior trading day? $ What's the stock's dividend yield? % What are the highest and lowest prices at which the stock traded during the latest 52-week period?

Highest price $ Lowest price $

How large is the market capitalization of the company? $ billion