Question Details

What is the 12 month trailing EPS and P/E ratio 



1.	Which one (s) is (are) an external financing and has the flotation cost?

a.	Retained earnings
b.	Bonds
c.	Preferred stock
d.	a & b
e.	b & c 

2.	The costs of financing from different sources are as follows:
IEF = 5%, EEF=6%, cost of debt before tax = 5%, tax rate=20%, the size of retained earnings=$30m. The capital structure is: We=40% and Wd=60%. Determine the WAMCC before and after the break point.

a.     4.4% 4.8%	
b.     4.4% 5.2%	
c.     4.6% 4.8%	
d.     4.6% 5.2%	
e.     4.8% 5.2%
	
3.	Given D1 = $1.00 and K=10%, what is the value of the stock at 8% growth rate? If the current price of the stock is $50, would you buy it?
 
a.	$55, Buy
b.	$54, Buy
c.	$55, Don’t
d.	$54, Don’t
e.	$50, Indifferent

4.	For a preferred stock with the dividend amount of $2.00 each quarter, what is the PV of it with an annual discount rate of 8%? If the price of the preferred stock is $80, what is the yield (ROI, APR) of this security?  

a.	$60, 8%
b.	$80, 8%
c.	$60, 10%
d.	$80, 10%
e.	$100, 10%

5.	I checked the Microsoft stock price at 9:12am this morning. It was $24.88. The last 12 month trailing (ttm) net earnings is $14.58 billion with 9 billion shares. What is the 12 month trailing EPS and P/E ratio ?

a.	$1.62, 15.36      
b.	$2.26, 13.31    
c.	$1.26, 17.88     
d.	$2.32, 12.21     
e.	$1.18, 20.33 



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