Questions from General Investment

Q: A firm has $750 million in total assets, no preferred

A firm has $750 million in total assets, no preferred stock, and total liabilities of $300 million. There are 300 million shares of common stock outstanding. The stock is selling for $5.25 per share....

Q: ZIPBIT common stock is selling at a P/E of 10

ZIPBIT common stock is selling at a P/E of 10 times trailing earnings. The stock price is $23.50. What were the firm’s earnings per share?

Q: Describe how, if at all, conservative and aggressive investors might

Describe how, if at all, conservative and aggressive investors might use each of the following types of transactions as part of their investment programs. Contrast these two types of investors in view...

Q: The following data have been gathered from the financial statements of HiFly

The following data have been gathered from the financial statements of HiFly Corporation: Calculate the times interest earned ratios for 2015 and 2016. Is the company more or less able to meet its i...

Q: Danny is considering a stock purchase. The stock pays a constant

Danny is considering a stock purchase. The stock pays a constant annual dividend of $2.00 per share and is currently trading at $20. Danny’s required rate of return for this stock is 12%. Should he bu...

Q: Larry and Curley are brothers. They’re both serious investors, but

Larry and Curley are brothers. They’re both serious investors, but they have different approaches to valuing stocks. Larry, the older brother, likes to use the dividend valuation model. Curley prefers...

Q: Growth Co had sales of $55 million in 2016 and is

Growth Co had sales of $55 million in 2016 and is expected to have sales of $83,650,000 for 2017. The company’s net profit margin was 5% in 2016 and is expected to increase to 8% by 2017. Estimate the...

Q: Consolidated Software doesn’t currently pay any dividends but is expected to start

Consolidated Software doesn’t currently pay any dividends but is expected to start doing so in four years. That is, Consolidated will go three more years without paying dividends and then is expected...

Q: You’re thinking about buying some stock in Affiliated Computer Corporation and want

You’re thinking about buying some stock in Affiliated Computer Corporation and want to use the P/E approach to value the shares. You’ve estimated that next year’s earnings should come in at about $4.0...

Q: AviBank Plastics generated an EPS of $2.75 over the

AviBank Plastics generated an EPS of $2.75 over the last 12 months. The company’s earnings are expected to grow by 25% next year, and because there will be no significant change in the number of share...