Questions from General Investment

Q: Our Space is a social media site that is growing in popularity

Our Space is a social media site that is growing in popularity. The firm has been around for a few years and has created a nice market niche for itself. In fact, it actually turned a profit last year,...

Q: Nabor Industries is considering going public but is unsure of a fair

Nabor Industries is considering going public but is unsure of a fair offering price for the company. Before hiring an investment banker to assist in making the public offering, managers at Nabor have...

Q: Jensen Inc. has total equity of $73 billion and 675

Jensen Inc. has total equity of $73 billion and 675 million shares outstanding. Its ROE is 12.7%. The dividend payout ratio is 21%. Calculate the company’s dividends per share (round to the nearest pe...

Q: Big Auto has an ROE of 8.6%. Its earnings

Big Auto has an ROE of 8.6%. Its earnings per share are $0.97, and its dividends per share are $0.37. Estimate Big Auto’s growth rate.

Q: During the previous year, Leveraged Inc. paid $110 million

During the previous year, Leveraged Inc. paid $110 million of interest expense, and its average rate of interest for the year was 8%. The company’s ROE is 11%, and it pays no dividends. Estimate next...

Q: From 2013 to 2018, Beer Brothers, Inc., paid dividends

From 2013 to 2018, Beer Brothers, Inc., paid dividends of $2.29, $2.36, $2.44, $2.48, $2.54, and $2.61. Use an Excel spreadsheet like the template shown to find Brother’s historical...

Q: Melissa Cutt is thinking about buying some shares of EZLawn Equipment at

Melissa Cutt is thinking about buying some shares of EZLawn Equipment at $42 per share. She expects the price of the stock to rise to $50 over the next three years. During that time she also expects t...

Q: Investors expect that Aviation Aircraft Parts will pay a dividend of $

Investors expect that Aviation Aircraft Parts will pay a dividend of $2.00 in the coming year. Investors require an 11% rate of return on the company’s shares, and they expect dividends to grow at 6%...

Q: The High-Growth mutual fund earned a return last year of

The High-Growth mutual fund earned a return last year of 11% and had a beta of 1.3. The Value Stock fund earned a return of 13% and had a beta of 1.5. The risk-free rate was 2%, and the market return...

Q: Not long ago, Ed Sheeran bought 400 shares of Division Signs

Not long ago, Ed Sheeran bought 400 shares of Division Signs Inc. at $47 per share; he bought the stock on margin of 60%. The stock is now trading at $60 per share, and the Federal Reserve has recentl...