1. What is meant by the dividend yield on a common share investment?
2. The president of a medium-sized plastics company was recently quoted in a business journal as follows, "We haven't had a dollar of interest-paying debt in over 10 years. Not many companies can say that." As a shareholder in this firm, how would you feel about its policy of not taking on interest-paying debt?
3. "If a share's market value exceeds its book value, then the share is overpriced." Do you agree? Explain.
4. A company seeking a line of credit at a bank was turned down. Among other things, the bank stated that the company's 2 to 1 current ratio was not adequate. Give reasons why a 2 to 1 current ratio might not be adequate.