Q6. A firm has 50,000 shares of stock outstanding, net income of $100,000, and a PE ratio of 15. What will the firm’s PE ratio be if the firm repurchases 25,000 shares? Assume all else remains constant.

1. 12
2. 13
3. 15
4. 7.5

Q7. A firm currently has 200,000 shares of stock outstanding at a market price per share of $120. Today, the firm announced a 3-for-1 reverse stock split. What will the price per share be after the split?

1. $240.00
2. $120.00
3. $40.00
4. $360.00

Q8. The ex-dividend date is ________ the holder of record date.

1. 2 days before.
2. 1 day before.
3. The same day as
4. 2 days after.

Q9. An investor owns 1000 shares of stock in ABC Corp. with a market value of $1,100. ABC declares a 100% stock dividend. After the dividend is paid, John owns____________

1. 2000 shares with a market value of $1,000.
2. 1100 shares with a market value of $1,000.
3. 1100 shares with a market value of $1,100.
4. 2000 shares with a market value of $1,100.

Q10. An investor purchased 300 shares of ABC Inc. stock on December 15. ABC paid its quarterly dividend of $1.10 a share on December 31. The record date was December 18. How much dividend income did the investor receive on December 31 from his investment in ABC stock?

1. $0.00
2. $110
3. $165
4. $330

Answer rating: 100% (QA)

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