2. In January 2008, Alberta based Net Keeper Software International Inc. introduced the first filtering software product of its kind. Today, Net Keeper develops and sells the world's most recognized Internet filtering and personal computer security products. Net Keeper has 100,000,000 no par value common shares authorized. The following information about issued share capital (expressed in U.S. dollars) is provided for Net Keeper for the years ended June 30, 2012, 2011, and 2010. 2012 2011 2010 Shares Amount Shares Amount Shares Amount Balance, beginning of year 12,507,998 $6,254,451 | 11,686,883 $5,975,679 7,819,794 $3,784,760 Issued during year 9,220,750 6,375,355 821,115 278,772 3,867,089 2,190,919 Balance, end of year 21,728,748 $12,629,806 12,507,998 $6,254,451 | 11,686,883 $5,975,679 The following additional information is also available: 2012 2011 Net Loss ($2,977,729) ($1,089,966) Average shareholders' equity 2,220,967 979,635 Market price per share 1.52 0.93 Required: a) Calculate the return on equity ratios for 2012 and 2011 to two (2) decimals. b) Net Keeper reported a loss in both 2012 and 2011. Yet, its market price per share is positive and increasing. Can you explain why investors might be willing to pay an increasing price for a Net Keeper share despite its apparent poor operating performance? c) Speculate as to why Net Keeper is likely financing its operations by issuing additional common shares rather than long-term debt. 2. In January 2008, Alberta based Net Keeper Software International Inc. introduced the first filtering software product of its kind. Today, Net Keeper develops and sells the world's most recognized Internet filtering and personal computer security products. Net Keeper has 100,000,000 no par value common shares authorized. The following information about issued share capital (expressed in U.S. dollars) is provided for Net Keeper for the years ended June 30, 2012, 2011, and 2010. 2012 2011 2010 Shares Amount Shares Amount Shares Amount Balance, beginning of year 12,507,998 $6,254,451 | 11,686,883 $5,975,679 7,819,794 $3,784,760 Issued during year 9,220,750 6,375,355 821,115 278,772 3,867,089 2,190,919 Balance, end of year 21,728,748 $12,629,806 12,507,998 $6,254,451 | 11,686,883 $5,975,679 The following additional information is also available: 2012 2011 Net Loss ($2,977,729) ($1,089,966) Average shareholders' equity 2,220,967 979,635 Market price per share 1.52 0.93 Required: a) Calculate the return on equity ratios for 2012 and 2011 to two (2) decimals. b) Net Keeper reported a loss in both 2012 and 2011. Yet, its market price per share is positive and increasing. Can you explain why investors might be willing to pay an increasing price for a Net Keeper share despite its apparent poor operating performance? c) Speculate as to why Net Keeper is likely financing its operations by issuing additional common shares rather than long-term debt