Use the annual report of Carnival Corporation for the 2007 ﬁscal year to answer the following questions. This information can be found on either the annual report or the SEC 10-K filing at www.carnival.com by following the links to Investor Relations.
(a) How many shares of common stock does Carnival have authorized, issued, outstanding, and in treasury for 2006 and 2007?
(b) Has Carnival authorized the issue of preferred stock? If so, why is it not listed on the balance sheet?
(c) What kinds of dividends has Carnival declared, if any, in 2006 and 2007?
(d) Calculate the following ratios for Carnival for the years 2007.
(1) Book value per share
(2) Dividend yield assuming a market value per share of $25
(3) Return on equity
(e) Comment on how an investor would interpret each of the measurements calculated in part (d). Based on the results, would you invest in Carnival? Explain the rationale of your answer.