Apply Valuation Metrics
Series 7 · Flashcards · Application
SERIES 7 · FLASHCARDS
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QUESTION
Calculate dividend yield if annual dividends are $2.00 and the stock price is $40.
QUESTION
Calculate EPS if net income is
$
120
M
\$120\text{M}
$120
M
, preferred dividends
$
20
M
\$20\text{M}
$20
M
, shares
50
M
50\text{M}
50
M
.
QUESTION
Calculate P/E if the market price is $45 and EPS is $3.00.
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ANSWER
15
15
15
. P/E is computed by dividing the current market price by earnings per share to assess relative value.
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