1. Yi Corporation has no preferred stock and reports the following: 2009 Earnings per share ............ $1.80...
Question:
2009
Earnings per share ............ $1.80
Dividends per share ............$0.72
Book Value per share-end of year ........$8.62
If price-to-book value at the end of 2012 equals 1.00, and return on beginning of year equity is expected to remain constant, then cost of equity (to nearest percent) equals:
A) 15%
B) 21%
C) 24%
D) Not determinable
2. If Yi Corporation had preferred stock outstanding then the earnings per share amount of $1.80 would be
A) Unchanged.
B) Cannot be determined.
C) Greater than $1.80.
D) Less than $1.80.
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1118845899
3rd edition
Authors: Robert Parrino, David S. Kidwell, Thomas W. Bates
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