6. Critical Thinking:Explain the immediate impact on the total value of all shares of the Chaparral Steel stock immediately after the split.What might be the long term impact on the value of the stock?

Problem 7/8/9/10Michelle Townsend owns stock in National Computers. Based on information in its annual report, National Computers has reported after-tax earnings of $9,700,000 and has issued 7,000,000 shares of common stock.The stock is currently selling for $32 a share.

7. Calculate the earnings per share for National Computers.

The earnings per share are $1.39

Earnings per share after tax in came /# of shares

Earnings per share =9,700,000/7,000,000= $1.39

8.Critical Thinking:Based on your results in #7. Explain what the earnings per share might indicate if last year's earnings per share were $1.67 per share. Assume the shares outstanding have not changed.

9. Calculate the price-earnings (PE) ratio for National Computers.

Price per share/Earnings per share

$32/$1.39 = $23.02

10. Critical Thinking:Based on your results in # 9. Assume the industry average for the PE ratio within the industry which National Computers competes is 19.Explain the relationship between National Computers PE ratio and the industry norm. Be sure to identify and explain if this would be viewed as a positive or negative by potential investors.

13. Currently, Boeing pays an annual dividend of $5.68. If the stock is selling for $180, what is the dividend yield?

$5.68/$180= 3.16%

14. Critical Thinking:Based on your results in #13. What would the dividend yield tell an investor about the dividend income related to $1 worth of Boeing stock? Be specific.

Answer rating: 100% (QA)

Based on the results provided in questions 7 9 13 and 14 lets address the critical thinking question... View the full answer