QuestionQuestion

Answer the following questions:

2.) Assume that the following quote for Merck,a NYSE stock appreared on August 1,2013(Tuesday)on Yahoo!Finance

Merek &Co Inc (MRK)-NYSE
44.56 up 0.39(0.88%) 1:34PM EDT
Prev Close   44.17                              Days range 44.25-44.79
Open:44.45                                        52wk range:29.47-45.17
Bid 44.63 *1400                                  5,345,943
Ask: 44.63 *1400                               15,788,300
1y Target Est: 45.69                           135,748
Beta:0.43                                           20.44
Next Earnings Date: N/A                   2.18
Div & yield                                          1.68 (3.80)

Given this information answer the following questions:

a.)At what price did the stock sell at the time of the quote?
b.)What us the stocks price/earnings ratio?
What does that indicate?
c.) what is the last price at which the stock traded on the prior trading day?
d.)What is the stocks dividend yield?
e.)What are the highest and lowest prices at which the stock traded during the latest 52-week period?
f.)How large is the market capitalization of the company?


9.) Assume that an investor short sell 500 shares of stock at a price of $ 75 a share making a 50 percent margin deposit.At year later ,she repurchases the borrowed   shares at $ 55 a share.

a.)how much of her own money did the short seller have to put up to make the transaction?
b.) How much money did the investor make or lose on this transaction?
c.)What rate of return did she make on her invested capital(see part a)


Chapter 12

2.)Selected financial information about upper end clothing inc is as follows:

Total assets: $20,000,000
Total liabilities: $8,000,000
Total preferred stock: $ 3,000,000
Total annual preferred stock dividends: $240,000
Net profits after tax:$2,500,000
Number of shares of common stock outstanding 500,000 shares
Current market price of common stock $50.00 a share
Annual common stock dividends $2.50 a share

Using the company’s financial information compute the following:

a.)the stocks dividend yield
b.)book value per share
c.)EPS
d.)P/E ratio


7.) The Clarkson company recently reported net profits after taxes of $ 15.8 million .It has 2.5 million shares of common stock outstanding and pays preferred dividends of $ 1 million a year.
The company’s stock currently trades at $ 60 per share..
a.)compute the stocks EPS
b.)what is the stocks P/E ratio?
c.)Determine what the stocks dividend yield would be if it paid $ 1.75 per share to common shareholders.

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