Question

Earnings per share (EPS) over the last 12 months=$2.50

Earnings per share (EPS) over the next 12 months=$4.00

Current stock price=$45

Number of common shares outstanding=20,000,000

Restricted stock = 1,000,000

Annual dividend per share=$1.50

Expected annual growth rate in earnings over the next 5 years=5%

Shares short=1,000,000

Average trading volume=10,000,000 shares

13. What is the market capitalization for YTB?

(a) $600m

(b) $700m

(c) $800m

(d) $900m

14. Based on your answer in question 13, YTB is a

(a) mid-cap stock.

(b) large-cap stock.

(c) small-cap stock.

(d) blue-chip stock.

15. What is the float for YTB?

(a) 19m shares

(b) 20m shares

(c) 21m shares

(d) 22m shares

16. What is the payout ratio (based on trailing earnings) for YTB?

(a) 20%

(b) 50%

(c) 60%

(d) 40%

17. What is the retention (or plowback) ratio for YTB

Earnings per share (EPS) over the last 12 months=$2.50

Earnings per share (EPS) over the next 12 months=$4.00

Current stock price=$45

Number of common shares outstanding=20,000,000

Restricted stock = 1,000,000

Annual dividend per share=$1.50

Expected annual growth rate in earnings over the next 5 years=5%

Shares short=1,000,000

Average trading volume=10,000,000 shares

13. What is the market capitalization for YTB?

(a) $600m

(b) $700m

(c) $800m

(d) $900m

14. Based on your answer in question 13, YTB is a

(a) mid-cap stock.

(b) large-cap stock.

(c) small-cap stock.

(d) blue-chip stock.

15. What is the float for YTB?

(a) 19m shares

(b) 20m shares

(c) 21m shares

(d) 22m shares

16. What is the payout ratio (based on trailing earnings) for YTB?

(a) 20%

(b) 50%

(c) 60%

(d) 40%

17. What is the retention (or plowback) ratio for YTB

Answer 1

13). Market capitalization = share price* number of shares = 45*20 million = 900 million (option d)

14). Mid-cap stocks have a market capitalization between $2 billion and $10 billion. Given that YTB has a market cap. of $0.9 billion, it is a small-cap stock. (option c)

15). Float = total shares outstanding - restricted stock = 20 - 1 = 19 million (option a)

16). Payout ratio (based on trailing earnings) = Dividend/EPS (last 12 months) = 1.50/2.50 = 60% (option c)

17). Retention ratio (based on the payout ratio calculated above) = 1-60% = 40%