Problem: Yi Corporation has no preferred stock and reports the following:
2009
Earnings per share $1.80
Dividends per share $0.72
Book Value per share-end of year $8.62
Q1. If price-to-book value at the end of 2009 equals 1.00, and return on beginning of year equity is expected to remain constant, then cost of equity (to nearest percent) equals:
A) 15%
B) 21%
C) 24%
D) Not determinable
Q2. If Yi Corporation had preferred stock outstanding then the earnings per share amount of $1.80 would be
A) unchanged.
B) cannot be determined.
C) greater than $1.80.
D) less than $1.80.
Q3. Interim financial reports are less _________ than annual financial reports.
A) relevant
B) consistent
C) timely
D) reliable