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Sedaia [141]
3 years ago
9

You are trying to choose between two stocks, Widget and Gadget. Widget has a current stock price of $30 and earnings per share o

f $2.00. Gadget has a current stock price of $20 and earnings per share of $1.00. Both are in the media industry and the average P/E ratio (price-to-earnings ratio) for this industry is 15. Use the P/E ratio to determine which stock you anticipate will have higher earnings.
Business
1 answer:
gizmo_the_mogwai [7]3 years ago
7 0

Answer:

Gadget will have higher earning.

Explanation:

Price Earning Ratio is the ratio of Market price to the earning per share. PE Ratio measure the effect of earning over the market price of the company.

Widget

Stock Price = $30

Earning per share = $2

PE ratio = $30 / $2 = 15 times

Gadget

Stock Price = $30

Earning per share = $2

PE ratio = $20 / $1 = 20 times

Gadget will have higher earning.

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On December 30, 2001, you decided to bet on the January effect, a well-known empirical regularity in the stock market. On that d
Andreas93 [3]

Answer:

Explanation:

a). Total share amount = number of shares bought*price per share = 400 x 149 = 59,600

Initial margin requirement = 55% x 59,600 = 32,780 (This is the equity which you put up. The remainder will be the loan which the brokerage gives you.)

b). Loan amount = Total amount - equity = 59,600 - 32,780 = 26,820

Let the price at which margin call is received be P. Then,

(Market value of shares - loan amount)/market value of shares = maintenance margin

(400P - 26,820) / 400P = 30%

280P = 26,820

P = 95.79

When the share price falls below this price, you will receive a margin call.

7 0
3 years ago
Read 2 more answers
Production and sales estimates for April for Crane Co. are as follows: Estimated inventory (units), April 1 19,000 Desired inven
melisa1 [442]

Answer:

a. 11,000 units

Explanation:

Particulars                                                               Amount

Expected Sales (units)                                            12,000 [3000+4750+4250]

Add: Ending inventory                                          18,000

Less; Beginning inventory                                      <u>19,000</u>

Number of units expected to be manufactured <u>11,000 </u>

5 0
3 years ago
Dividends to common stockholders are
posledela
Interest paid to the share holder of a specific company that offers a dividend. (note: not all companies pay dividends).
3 0
4 years ago
To determine the true cash balance Multiple Choice a. add bank collections of depositors’ accounts receivable to the unadjusted
tensa zangetsu [6.8K]

Answer: d. All of the answers describe adjustments that must be made to the unadjusted book balance in order to determine the true cash balance.

Explanation:

Options A to C all need to be done to ascertain the True cash balance.

The bank collections from accounts needs to be added to reflect that money was received.

Bank charges need to be subtracted to reflect that the Bank has taken away some money for their administrative roles.

Interest earned from the bank as an income needs to reflect as well.

6 0
3 years ago
For every $100 in assets, a bank has $40 in interest-rate sensitive assets, and the other $60 in non-interest-rate sensitive ass
drek231 [11]

Answer:

the bank's profits will decrease by $0.10 per $100 of assets

Explanation:

increase in revenues                                        increase in expenses

$40 x 5% = $2                                                   $50 x 3% = $1.50

<u>$40 x 6% = $2.40 </u>                                             <u>$50 x 4% = $2     </u>

+$0.40                                                                + $0.50

if the interest rates increase, the bank's revenues will increase by $0.40 for every $100 worth of assets, but its expenses will also increase and in a higher proportion. The bank's expenses will increase by $0.50, so the net change will be $0.40 - $0.50 = -$0.10 or $0.10 less profits

3 0
4 years ago
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