Microsoft Word - ex1_25from46_StackAA.doc

2. Shareholders had a good year, earning a 18% annual rate of return. The P/E ratio today is 13.9 and the company just announced earnings per share of $3.20 . The company has a 25% payout ratio. How much did the stock price change over the past year?
a. $5.55 b. $4.59 c. $6.72 d. $6.11 e. $5.05

3. The Company had quite a few changes during the past year. The changes for their different balance sheet items from last year to this year were (the changes in parentheses are declines; otherwise the changes are increases): $6,800 for Receivables; ($6,500) for Payables; $6,200 for Cash; $7,800 for Short-term Notes Payable; ($6,900) for Plant, Property, & Equipment; and $4,400 for Long-Term Debt. Which statement is most accurate?
a. The change in net working capital is $10,200 and represents a source of financing b. The change in net working capital is $11,700 and represents a use of financing
c. The change in net working capital is $10,200 and represents a use of financing
d. The change in net working capital is $13,500 and represents a use of financing
e. The change in net working capital is $11,700 and represents a source of financing