The price-earnings ratio

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Question 1:

1) Describe the price-earnings ratio. What can investors learn from interpreting the results of this ratio?

2) Select a company that trades common stock on the NYSE. Please identify and describe the information that is included in the stock trading reports for that stock.

(500-550 words in word document with references 6 years or less old)(Please follow APA format) Please 3 references from journals or books will be appreciated. Write everything in own words.

Question 2:

Chapter 6

11. Bond Pricing. A 30-year-maturity bond with face value of $1,000 makes semiannual coupon payments and has a coupon rate of 8%. What is the bond’s yield to maturity if the bond is selling for: (LO6-2) a. $900? b. $1,000? c. $1,100?

12. Bond Pricing. The following table shows some data for three zero-coupon bonds. The face value of each bond is $1,000. (LO6-2)

Bond Price Maturity (years) Yield to Maturity

A $300 30 —

B 300 — 8%

C — 10 10

a. What is the yield to maturity of bond A? (Express your answer as a percentage rather than a decimal.) b. What is the maturity of B? c. What is the price of C?

13. Pricing Consol Bonds. Perpetual Life Corp. has issued consol bonds with coupon payments of $60. (Consols pay interest forever and never mature. They are perpetuities.) (LO6-2) a. If the required rate of return on these bonds at the time they were issued was 6%, at what price were they sold to the public? b. If the required return today is 10%, at what price do the consols sell?

Chapter 7

1. Stock Markets. True or false? (LO7-1) a. The bid price is always greater than the ask price. b. An investor who wants to sell his stock immediately should enter a limit order. c. The sale of shares by a large investor is usually termed a “primary offering.” d. Electronic Communications Network refers to the automated ticker tape on the New York Stock Exchange. bre13960_ch07_196-237.indd 229 1/29/19 5:40 PM 230 Part Two Value

2. Stock Quotes. Go to finance.yahoo.com and get trading quotes for IBM. (LO7-1) a. What are the latest stock price and market cap? b. What is the bid-ask spread? c. What are IBM’s dividend payment and dividend yield? d. What is IBM’s P/E ratio?

3. Stock Quotes. Here is a small part of the order book for Mesquite Foods: (LO7-1)

Bid Ask

Price Size Price Size

103 100 103.5 200

102.5 200 103.8 200

101 400 104 300

99.8 300 104.5 400

a. Georgina Sloberg submits a market order to sell 100 shares. What price will she receive? b. Norman Pilbarra submits a market order to buy 400 shares. What is the maximum price that he will pay? c. Carlos Ramirez submits a limit bid order at 105. Will it execute immediately?

4. P/E Ratios. Favorita Candy’s stock is expected to earn $2.40 per share this year. Its P/E ratio is 18. What is the stock price? (LO7-1)

5. Dividend Yield. BMM Industries pays a dividend of $2 per quarter. The dividend yield on its stock is reported at 4.8%. What is the stock price? (LO7-1)

14. Constant-Growth Model. Arts and Crafts Inc. will pay a dividend of $5 per share in 1 year. It sells at $50 a share, and firms in the same industry provide an expected rate of return of 14%. What must be the expected growth rate of the company’s dividends? (LO7-2)

 

 

Sample Solution

lusive focus on the middle-class, bourgeoise household. This claustrophobic setting is overt in its marked isolation. It is, at first glance, untouched by the influence of the outside world. However, a close reading of the “tastefully, though not expensively, furnished room.” (109) reveals an unmistakeable consciousness surrounding financial matters. In other words, the pressures of capitalism can already be spotted within the household. In this light, the room’s interiors appear to be a calculated facade imitating comfort yet bearing marks of concern towards matters of wealth and appearance. Mark Sanberg expands upon this idea of innate corruption within the bourgeoise household by stating that Ibsen’s text is concerned with “dislodging the home from its privileged association with domestic ideals and the testing of the “house” as a modern alternative.” (85). Indeed, the distinction between the home and the house is an important one. The house is stripped of its elevated position as a secure space and instead occupies a more liminal position, prone to change and invasion. This differs from Tagore’s text which has no apparent engagement with capitalist affairs at the outset. Instead, Bimala’s household is initially unmarred by the influence of external forces “It transcended all debates, or doubts, or calculations: it was pure music.” (18). However, it would presumptuous to suggest that this state of bliss is indefinite as the looming presence of the outside world is certainly visible within Bimala’s narrative “What do I want with the outside world?” (23). Such allusions are important as they highlight the threat of what lurks beyond the safety of the household. In this sense, Berman’s vision of modernity as “a maelstrom of perpetual disintegration” (15) does not coalesce neatly with how it is presented in Ibsen and Tagore’s texts. This is because a maelstrom is indicative of a vortex, consuming the matter that surrounds it. It is not subtle, it is antagonistic. Yet, in both pieces it is more akin to an infection, spreading outwards and contaminating all that it touches. It is not an aggressive force, like a maelstrom, as much as it is an inevitable process of change.

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