Midwood High School

FIN MISC

CHAPTER 12

1)What is a stockholders relationship to the corporation.

1. 1. What are the shareholder’s right to corporate assets?
   2. What are the shareholder’s rights to corporate earnings?

2. Explain the concept of limited liabilIty.
3. What is a dividend?

a)Who determines whether a dividend is to be paid?

b) Explain the three important dates in the life of a dividend

4. One of the essential rights of a shareholder is to vote for corporate director’s and other important decisions. If you own 50 shares of Starbucks and their annual meeting (where the vote occurs)is in Seattle tomorrow how can you vote your shares short of hopping on a plane to the coast?

5. What is a stock repurchase?
   1. What impact will a stock repurchase have on a company's per share stock price? It increases share prices.

6. Compare a stock split to a stock repurchase. How doesit differ?

7. How is earnings per share determined? What information does it provide for shareholders?

8. How is a dividend yield determined? What information does it provide for shareholders?

9. Using the Stock Classifications on Table 12.1 on p 412 and Yahoo Finance please match the following stocks with their classifications

• Blue Chip                                                 1) Amazon (AMZN)

• Growth                                                                    2) Delta Airlines (DAL)
• Income                                                     3) Independence Realty Trust (IRT)

• Speculative                                             4) Coca Cola (KO)
• Cyclical                                                                      5) Proctor & Gamble (PG)
• Defensive                                               6) Tesla (TSLA)

10. What is meant by “market cap”? Differentiate between large cap, mid cap & small cap stocks.
11. Page 414 discusses price/earnings ratio. This tells you how many times one year’s earnings a stock is valued.

• How is it calculated?
• Does a higher p/e ratio tell you that the public is optimistic or pessimistic about a company’s future growth potential?

12. Take a look at Table 12.2 on page 419. If this investor just bought $4,000 worth of stock in Year 1, Quarter 1 how many shares would she have acquired? Is dollar cost averaging a good idea? Why or why not?

13. Please complete Textbook Assignment 7 on the top of page 431. If you have the ebook contact me for the Assignment.

7. Use the information in the table below to answer the following questions.
   1. What is the current dividend yield for Boeing Company based on the stock’s recent closing price?
   2. What is your estimate of Boeing’s earnings for the year based on its recent closing price?
   3. Based on the net change, at what price did Boeing close yesterday?