1. What does P/E Ratio of a 10 indicate? a. It would take 10 years for an investor to recover his or her initial investment b. The firm will pay a dividend of $10 per share. c. The value of the stock will be 10 times the initial investment at the time of maturity. d. An investor would receive 10 percent of the total earnings of the firm, at the time of liquidation
2. Suppose a U.S. treasury bond will pay $2,500 five years from now. If the prevailing interest rate on 5-year treasury bonds is 4.25%, compounded semiannually, the value of the bond is closest to:
3. The present value of $10,000 to be received in 10 years, discounted at an annual rate 6.78% is closest to?
4. Which one of the following is a source of cash? a) Increase in accounts receivable, b) Decrease in accrued liabilities, c) Decrease in bank loan, d) Increase in retained earnings