Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
expand_more
expand_more
format_list_bulleted
Related questions
Question
What was the change in Global's book value of equity from to according to Table 2.1 ...? Does this imply that the market price of Global's shares increased in ? Explain.
What was the change in Global's book value of equity from 2018 to 2019?
Global's book value of equity changed by $enter your response here
million from 2018 to 2019. (Round to one decimal place.)
Part 2
Does this imply that the market price of Global's shares increased in 2019? Explain. (Select all the choices that apply.)
Transcribed Image Text:Data table
Global Corporation Balance Sheet for 2019 and 2018 ($ millions)
Assets
2019
2018
Liabilities and Stockholders' Equity
2019
2018
Current Assets
Current Liabilities
Accounts payable
Notes payable/short-term debt
Cash
22.5
21.2
29.8
27.4
Accounts receivable
18.5
13.3
5.1
3.8
Inventories
14.6
14.3
Total current liabilities
34.9
31.2
Total current assets
55.6
48.8
Long-Term Liabilities
Long-Term Assets
Net property, plant, and equipment
Total long-term assets
76.8
Long-term debt
Total long-term liabilities
110.4
113.2
80.9
110.4
76.8
113.2
80.9
Total Liabilities
145.3
108.0
Stockholders' Equity
Common stock and paid-in surplus
Retained earnings
Total Stockholders' Equity
8.9
8.9
14.6
12.8
23.5
21.7
168.8
129.7
Total Assets
168.8
129.7
Total Liabilities and
Stockholders' Equity
Transcribed Image Text:What was the change in Global's book value of equity from 2018 to 2019 according to Table 2.1 E? Does this imply that the market price of Global's shares
increased in 2019? Explain.
What was the change in Global's book value of equity from 2018 to 2019?
Global's book value of equity changed by $ million from 2018 to 2019. (Round to one decimal place.)
Does this imply that the market price of Global's shares increased in 2019? Explain. (Select all the choices that apply.)
O A. There are many events that may affect Global's future profitability, and hence its share price, that do not show up on the balance sheet.
O B. An increase in book value necessarily indicates an increase in Global's share price. The book value of the equity does not go up unless the share price
goes up.
O C. The market value of a stock does not depend on the historical cost of the firm's assets, but on investors' expectatiọn of the firm's future performance.
O D. An increase in book value does not necessarily indicate an increase in Global's share price.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Equal-weighted Index Return. Stock Carnival Cruise (CCL) Disney (DIS) ● Price 1 (1/1/2016) Quantity Price 2 (6/1/2016) $43.13 $95.82 105.5 47.5 Equal-weighted index return calculation: • Where did these quantities come from? ● $44.20 $97.82 Price change (%)arrow_forwardcks A and B have the following historical returns: Year 2016 2017 2018 2019 2020 Stock A's Returns, ra (17.90%) 30.00 13.25 (3.50) 29.75 Stock B's Returns, ra (14.20%) 22.70 a. Calculate the average rate of return for each stock during the period 2016 through 2020. Round your answers to two decimal places. Stock A 39.50 (7.10) 10.70 Stock B b. Assume that someone held a portfolio consisting of 50% of Stock A and 50% of Stock 8. What would the realized rate of return on the portfolio have been each year? Round your answers to two decimal places. Negative values should be indicated by a minus sign. Year 2016 2017 2018 2019 2020 What would the average return on the portfolio have been during this period? Round your answer to two decimal places. Portfolio CV e. Assuming you are a risk-averse investor, would you prefer to hold Stock A, Stock B, or the portfolio? ele Calculate the standard deviation of returns for each stock and for the portfolio. Hound your answers to two decimal places.…arrow_forwardYearEPSDividendChange 20130.75 20140.78 20150.81 20160.82 20170.85 20180.90 Payout Ratio:30% Required Rate of Return: 10% Current Stock Price P0:$5.00 1) Dividend amount in 2013: 2) Dividend CAGR: 3) 2019 Dividend: 4) Intrinsic value: 5) Compared to P0: 6) Required rate of return (solver or goal seek): The following table contains the six-year EPS history for Corporation X. The dividend payout ratio is 30%. 1) What is the dividend amount paid in 2013? 2) What is the compound growth rate (CAGR) of the dividend based on the dividend paid from 2013 - 2018? 3) Assume dividend is growing at the the compound growth rate of the dividend in 2019, what is the dividend per share paid in 2019? 4) Use dividend constant growth model, calculate the intrinsic value of the stock using a 10% required rate of return. 5) How does the calculated intrinsic value compare to the current stock price of $5? Use IF statement. 6) Use the Goal Seek or Solver option to find the required rate…arrow_forward
- sach.2arrow_forwardo The following information is available concerning the price evolution of Microsoft stocks between 2016-2019 and the dividends paid by them. Date March 1, 2016 April 1, 2016 July 1, 2016 March 1, 2017 March 1, 2019 Close price 55.23 49.87 56.68 65.86 117.94 Total Dividends - 0.36 1.50 4.88 o Requirements: Considering that you bought Microsoft shares on March 1, 2016, compute the holding-period return for each maturity • Annualize the holding-period returns using EAR and APR • Comment on the resultsarrow_forwardNonearrow_forward
- Given the information below for Seger Corporation, compute the expected share price at the end of 2022 using price ratio analysis. Assume that the historical (arithmetic) average growth rates will remain the same for 2022. Note: Do not round intermediate calculations. Round your answers to 2 decimal places. Year Price EPS CFPS SPS 2016 $61.10 Using PE ratio Using P/CF ratio Using P/S ratio 3.35 8.12 31.20 2017 $67.00 4.06 8.92 36.20 $ $ 2018 $ 65.70 4.86 9.22 35.60 Share Price 0.17 0.11 2019 2020 $ 63.20 $ 84.70 5.56 7.85 10.97 12.31 39.10 50.30 2021 $100.10 8.85 13.44 58.30arrow_forward30. Questions 30 and 31 are related. Use the following information regarding an equal-weighted equity index and assume that all dividend payments are made at the end of the year and are reinvested in the stock that paid the dividend. Security Price at the End of 2021 Price at the End of 2022 Dividends per Share A $26 $0.50 B $45 $0.20 C $36 $0.40 Ꭰ $135 $0.50 Note: The dollar value of the index on December 31, 2021 is $10,000 and using a divisor of 100, the index level equals 100. a. b. C. 31. a. b. C. The weight of Security B in the index on December 31, 2022 with dividends reinvested and before rebalancing is closest to: 16.75% 18.55% 19.24% $25 $50 $31.25 $100 7.35% 7.87% The total return on the index referenced in the previous question for the year 2022 is closest to: 8.90% d. 22.16% e. 23.33% f. 25.00% d. 10.53% e. 12.10% f. 12.54%arrow_forwardRaghubhaiarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Essentials Of InvestmentsFinanceISBN:9781260013924Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.Publisher:Mcgraw-hill Education,
Foundations Of FinanceFinanceISBN:9780134897264Author:KEOWN, Arthur J., Martin, John D., PETTY, J. WilliamPublisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...FinanceISBN:9781337395250Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...FinanceISBN:9780077861759Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan ProfessorPublisher:McGraw-Hill Education
Essentials Of Investments
Finance
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:9780134897264
Author:KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:Pearson,
Fundamentals of Financial Management (MindTap Cou...
Finance
ISBN:9781337395250
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i...
Finance
ISBN:9780077861759
Author:Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:McGraw-Hill Education