Author Question: One danger of EBIT-EPS analysis is that it ignores the implicit cost of debt financing. Indicate ... (Read 168 times)

Chloeellawright · **on:** Jul 10, 2018

One danger of EBIT-EPS analysis is that it ignores the implicit cost of debt financing.

Indicate whether the statement is true or false

Question 2

Stanley Company pays out 35 of its annual earnings to its common shareholders in the form of a dividend. Earnings per share are expected to be 3.25 at the end of this year and are expected to grow at 2 per annum perpetually.

If you require a return of 8 on this investment, how much are you willing to pay for the stock?
A) 18.96
B) 19.34
C) 43.55
D) 54.17
E) 55.25

Question 3

Suppose you invest 2,000 today, compounded monthly, with an annual interest rate of 7.50. What is your investment worth in one year?

A) 2,150.00
B) 2,152.81
C) 2,155.27
D) 2,154.77

kjohnson · **Reply #1 on:** Jul 10, 2018

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