P6.2 An investor deposits $20,000 into a new brokerage account. The investor buys 1,00 shares of Tipco stock for $19 per share. Two weeks later, the investor sells the Tipco stock for $20 per share. When the investor receives his brokerage account statement, he sees that there is a balance of $20,900 in his account:
Item Number Price per Share Total Transaction Account Bal
1.Deposit $20,000 $20,000
purchase 1,000 shares $19 ( $19,000) $20,000
3.Tipco sale 1,000 shares $20 $20,000 $21,000
What belongs in item 4 on this statement?
P6.4 Lots ov’ Profit, Inc., is trading at $25 per share. There are 250 million shares outstanding. What is the market capitalization of this company?
P6.6 On January 1 2010, an investor bought 200 shares of Gottahavit, Inc., for $50 per share. On January 3 2011, the investor sold the stock for $55 per share. The stock paid quarterly dividend of $0.25 per share. How much (in $) did the investor earn on his investment, and, assuming the investor is in the 33% tax bracket, how much will she pay in income taxes on this transaction?
P6.8 East Coast Utilities is currently trading at $28 per share. The company pays quarterly dividend of $0.28 per share. What is the dividend yield?
P6.10 Wilfred Nadeau owns 200 shares of Consolidated Glue. The company’s board of directors recently declared a cash dividend of 50 cents a share payable April 18 ( a Wednesday) to shareholders of record on March 22 ( a Thursday).
- How much in dividends, if any, will Wilfred receive if he sells his stock on March 20?
- Assume Wilfred decides to hold onto the stock rather than sell it. If he belongs to the company’s dividend reinvestment plan, how many new shares of stock will he receive if the stock is currently trading at $40 and the plan offers a 5% discount on the share price of the stock? (assume that all of Wilfred’s dividends are diverted to the plan.) Will Wilfred have to pay any taxes on these dividends, given that he is taking them in stock rather than cash?
P6.12 Using the resources available at your campus or public library, or on the Internet, select any three common stocks you like and determine the latest book value per share, earnings per share, dividend payout ratio, and dividend yield for each. (Show all your calculation.)
P7.2 BOOKV has $750,000,000 in total assets no preferred stock, and total liabilities of $300,000,000. There are 300,000,000 shares of common stock outstanding. The stock is selling for $5.25 per share. What is the price-to-book ratio?
P8.2 Growth Co had sales of $55 million in 2008, and is expected to have sales of $83,650,000 for 2011. The company’s net profit margin was 5% in 2008, and is expected to increase 8% by by 2011. Estimate the company’s net profit for 2011.
P9.2 Listed below are data that pertain to the corporate bond market.
Period 1 Period 2 Period3 Period4
Average yield on 10 high-grade 5.30% 5.70% 5.10% ?
Yield on the Dow Jones average of 6.50% ? 6.00% 4.90% 40 corporate bonds
Yield spread (in basis points) ? 155 ? 25
- Compute the confidence index for each of the four periods listed above.
- Assume the latest confidence index (for period 0, in effect) amounts to 86.83%, while the yield spread between high – and average-grade corporate bonds is 85 basis points. Based on your calculations, what’s happening to bond yield spreads and the confidence index over the period of time covered in the problem (i.e., from period ) through period 4)?
- Based on the stock market? In which one or more periods (1 through 4 ) is the confidence index bullish? In which one(s) is it bearish?
P9.4 Below are figures representing the number of stocks making new highs and new lows for each month over a six-month period:
Month New Highs New Lows
July 117 22
August 95 34
September 84 41
October 64 79
November 53 98
December 19 101
Would a technical analyst consider the trend to be bullish or bearish over this period?
P9.6 At the end of trading day you find that the advance/decline ratio for the session was 1.2 What does that mean?
P9.8 You have collected the following NH-NL indicator data:
______Day NH-NL Indicator
1 (yesterday) 100
If you are a technician following a momentum-based strategy, are you buying or selling today?
P9.10 You find the closing prices for a stock you own. You want to use a 10-day moving average to monitor the stock. Calculate the 10-day moving average for 10 days 11 through 20. Based on the data in the table below, are there any signals you should act on? Explain.
Day Closing Price Day Closing price
1 $25.25 11 $30.00
2 $26.00 12 30.00
3 $27.00 13 31.00
4 $28.00 14 31.50
5 $27.00 15 31.00
6 $28.00 16 32.00
7 $27.50 17 29.00
8 $29.00 18 29.00
9 $27.00 19 28.00
10 $28.00 20 27.00