Question: 1. Yellow Corp. is evaluating an extra dividend versus a share repurchase. In either case, $6,000 would be spent. Current earnings are $0.86 per share

1. Yellow Corp. is evaluating an extra dividend versus a share repurchase. In either case, $6,000 would be spent. Current earnings are $0.86 per share and the stock currently sells for $40 per share. There are 1,600 shares outstanding. Ignore taxes and other imperfections. After the $3.75 dividend, the price falls to $36.25 per share. What are earnings per share (EPS) and the price earnings (P/E) ratio? answers rounded to 2 DECIMAL PLACES. please do not round until the end.

2. An investment promises to pay $490 per year forever with the first payment one year from now. If its value is $6,420, what rate of return are you earning on this investment? Enter your answer as a percentage. rounded to 2 decimal places. please do not round until the end

3. Suppose you take a 6 year loan of $25,000 with an interest rate of 10% and annual payments starting at the end of year 1. What are the annual loan payments?

4. Barren Wuffett is giving you a prize for correctly predicting the bracket for the NHL Playoffs. Barren Wuffett lets you choose the prize you wish to receive. Which prize would you choose if the interest rate is 2%?

675 million lump sum
$20 million per year for 45 years

5. Assume the total cost of a university education will be $60,000 when your child enters university in 7 years. You presently have $25,000 to invest. What annual rate of interest (APR) must you earn, if the interest is compounded semi-annually? Enter your answer as a percentage. answer rounded to 2 decimal places. please do not round until the end

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!