Question 1

Buskin's Corporation has issued 2 million shares of stocks.Its earnings were $10 million dollars of which it retained $6 million.What was the dividend per share?

Accepted Answer

The total dividends paid out is $10 million - $6 million = $4 million. With 2 million shares, the dividend per share is $4 million / 2 million shares = $2 per share.

Question 2

The amount of revenue a firm receives for the sale of its products minus its costs of production as measured by its accountants is the firm's

Accepted Answer

This is the definition of earnings, which is the accounting measure of a firm's profit.

Question 3

Dependable Appliances had a PE ratio of 25,earnings per share of $4,and retained earnings per share of $3.What was its dividend yield?

Accepted Answer

Dividend yield is the ratio of the annual dividend per share and the stock's current market price. The information given does not provide the stock's current market price, so we cannot directly calculate the dividend yield. However, we know that the earnings per share is $4 and the retained earnings per share is $3. If the company paid out all of its retained earnings as dividends, then the total dividends per share would be $7. If the market price per share is $100 (just as an example), then the dividend yield would be 7/100 = 0.07 or 7%. However, if the market price per share is higher, then the dividend yield would be lower. Therefore, the only possible answer based on the given information is C) 1%, since it is the lowest choice.

Question 4

Thomas Publishing has a share price of $30,retained earnings of $1 per share,and a dividend yield of 5%.What is its PE ratio?

Accepted Answer

The answer of Thomas Publishing has a share price of...

Question 5

Volume,as reported in stock tables refers to the

Accepted Answer

The answer of Volume,as reported in stock tables refers to...

Question 6

A corporation's earnings are

Accepted Answer

A corporation's earnings are typically calculated as the amount of revenue it receives for the sale of its products minus its costs of production as measured by its accountants. This calculation does not take into account any dividends paid out to shareholders. Option A is a close choice, but it includes dividends, which are not considered part of earnings. Options B and D involve measuring costs of production using economists, which is not typically how earnings are calculated.

Question 7

A dividend yield is the

Accepted Answer

Dividend yield is calculated as a percentage by dividing the annual dividend amount by the current share price. Therefore, dividend yield is the dividend as a percentage of the price per share.

Question 8

PacknCamp Corporation has a stock price of $50,has issued 2,000,000 shares of stock,has retained earnings of $4 million dollars,and a dividend yield of 4 percent.The price-earnings ratio of PacknCamp is

Accepted Answer

The formula for price-earnings ratio (P/E ratio) is:

P/E ratio = Stock Price / Earnings Per Share

To calculate Earnings Per Share (EPS), we need to subtract the dividend paid per share from the earnings retained per share and divide it by the number of shares:

EPS = (Retained Earnings - Dividends) / Number of Shares

Here, Retained Earnings = $4 million, Number of Shares = 2,000,000, and Dividend Yield = 4%.

Dividend per share = Stock Price * Dividend Yield = $50 * 0.04 = $2
Retained Earnings per share = Retained Earnings / Number of Shares = $4,000,000 / 2,000,000 = $2

EPS = ($2 - $2) / 2,000,000 = $0

Therefore, P/E ratio = $50 / $0 = ∞

We cannot divide by 0, so the P/E ratio is undefined. None of the given choices are correct.

Question 9

Profits not paid out to stockholders are

Accepted Answer

Profits not paid out to stockholders are known as retained earnings. This is the amount of profit that the company keeps and reinvests into the business. This answer is the best choice because it is the only option that accurately describes profits not paid out to stockholders. Dividends are distributable profits, and the price-earnings ratio uses earnings per share as the denominator, not retained earnings.

Question 10

A high price-earnings ratio indicates that either the stock is

Accepted Answer

A high price-earnings ratio indicates that the stock is overvalued and that people are relatively optimistic about the corporation's prospects. This is because the higher price-earnings ratio means investors are willing to pay more for each dollar of earnings, indicating that they expect earnings to grow in the future. However, it is important to note that a high price-earnings ratio alone does not necessarily mean that a stock is overvalued, as other factors such as growth prospects and industry trends should also be considered.

Question 11

Mount Adams Jazz Corporation has a price of $100,a dividend of $0.80,and retained earnings of $2.00 per share.The dividend yield on this stock is

Accepted Answer

The dividend yield is calculated as the annual dividend divided by the price per share. Here, it's $0.80 / $100 = 0.008 or 0.8 percent.

Question 12

Retained earnings are

Accepted Answer

Retained earnings are the portion of a company's profits that are not paid out as dividends but are instead reinvested in the business or kept as reserves.

Question 13

A low price-earnings ratio indicates that either the stock is

Accepted Answer

The answer of A low price-earnings ratio indicates that either...

Question 14

ACME Pumps had a price to earnings ratio of 15,paid a dividend of $1,and retained earnings of $2 a share.What was the price of a share of its stock?

Accepted Answer

The answer of ACME Pumps had a price to earnings...

Question 15

Queen City Sausage stock is selling at $40 per share,it has retained earnings of $2.00 per share and dividends of $.50 per share.What is the price-earnings ratio and what is the dividend yield?

Accepted Answer

The price-earnings ratio is calculated by dividing the stock price by the earnings per share. In this case, the earnings per share would be the retained earnings plus the dividends, which equals $2.50. Therefore, the price-earnings ratio would be $40/$2.50 = 16. The dividend yield is calculated by dividing the annual dividend per share by the stock price, and then multiplying by 100 to get a percentage. In this case, the annual dividend per share is $0.50, so the dividend yield would be ($0.50/$40) x 100 = 1.25 percent.

Question 16

Profits paid out to stockholders are

Accepted Answer

Profits paid out to stockholders are dividends. Retained earnings refer to profits that are not distributed as dividends but are kept by the company for future use. The denominator in the price-earnings ratio is the company's earnings per share, which may or may not include dividends. Therefore, option B is the best choice.

Question 17

Stock in Precision Instruments is selling at $25 per share.It had earnings of $5 a share and a dividend yield of 5 percent.What is the dividend and the price-earnings ratio?

Accepted Answer

The answer of Stock in Precision Instruments is selling at...

Question 18

Over-the-Rhine Cheese Corporation had a PE ratio of 20,retained earnings of $1.5 per share and a dividend of $.50.What was its dividend yield?

Accepted Answer

Dividend yield = Dividend per share / Market price per share= $.50 / $10= 5%

Question 19

Thomas Publishing has a price of $20 a share,outstanding shares of 2.5 million,retained earnings of $1 million dollars,and a dividend yield of 2 percent.It has a price to earnings ratio of

Accepted Answer

To calculate the price-to-earnings ratio, we need to divide the market price per share by the earnings per share. We are not given earnings per share in the question stem, so we cannot calculate the P/E ratio directly. However, we do know that the company has retained earnings of $1 million and a dividend yield of 2 percent. A company's dividend yield is the annual dividend payment divided by the current stock price. In this case, the dividend yield is 0.02 * $20 = $0.40 per share. If we assume that the company pays out its entire $1 million earnings in dividends, we can calculate the earnings per share as follows:

Earnings per share = Total earnings / Number of shares
Earnings per share = $1 million / 2.5 million shares
Earnings per share = $0.40 per share

Now we can calculate the P/E ratio:

P/E ratio = Market price per share / Earnings per share
P/E ratio = $20 / $0.40
P/E ratio = 50

A P/E ratio of 50 is considered high by historical standards, indicating that investors are willing to pay a premium for the company's earnings. Therefore, the correct choice is C.

Question 20

Historically,the typical price-earnings ratio is about

Accepted Answer

Historically, the typical price-earnings (P/E) ratio for the stock market has been around 15, which is considered a benchmark for evaluating whether a stock is overvalued or undervalued.

Quiz 26: Saving, investment, and the Financial System