This case is based on the RadioShack Corporation consolidated financial statements in Appendix B at the end

Question:

This case is based on the RadioShack consolidated in Appendix B at the end of this book.
1. Focus on the company’s Consolidated Statements of Income for the three years ended December 31, 2010, as well as Note 2 summarizing the company’s significant accounting policies. What is your evaluation of the quality of RadioShack Corporation’s earnings? Explain how you formed your opinion.
2. At the end of 2010, how much would you have been willing to pay for one share of RadioShack Corporation’s stock if you had rated the investment as high risk? As low risk? Use even-numbered investment capitalization rates in the range of 4%–10% for your analysis, and use basic earnings per share for continuing operations.
3. Go to RadioShack Corporation’s Web site and get the current price of a share of its common stock. Which value that you estimated in Requirement 2 is closest to the company’s actual stock price?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...