Question 18

1. The shareholders required rate of return is the sum of the expected dividend yield and the expected

a. prime interest rate.

b. PE ratio.

c. stock price appreciation.

d. option premium.

Question 19

1. Atol Corp. has a price/book ratio of 1.3, a P/E ratio of 18, and current earnings of $2.00/share. Its current book value/share is:

a. $36.00

b. $27.69

c. $23.40

d. $11.70