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LET'S PRACTICE
Name: _____________________________________________________________________________
Stump the Stock Analyst
Refer to these stock tables to answer questions 1 - 12.
52W HI 53.28
52W L 32.31
Stock
Tkr
Div
Yld % —
P/E
EPS
Vol
Low
Cls
Net Chg
MrkCap
Hi
0.42
AOL Inc.
AOL
—
—
.91
1,223,070
41.84
42.53
3.35B
42.66
52W HI 144.57
52W L 116.32
Stock
Tkr
Div
Yld % 2.40
P/E
EPS
Vol
Hi
Low
Cls
Net Chg
MrkCap
1. Over the past 52 weeks, which of these companies had the biggest per share price change in dollars ? Which had the biggest price change from the prior day’s trading at close ? _ ______________________________________________________________________________ 2. Your Grandma needs a stock with reliable dividend income. Which of these stocks is better for her? _ ______________________________________________________________________________ 3. What is yield ? Why is there no yield for AOL and iRobot? _ ______________________________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________ 4. Calculate the yield based on the closing price of $42.66, if AOL were to declare a dividend of $1.50 per share. _ ______________________________________________________________________________ 5. As of this writing, Netflix sells at $565.24 per share. Earnings are about $3.84 per share. If we divide the stock price by the EPS we get a P/E ratio of 147.19. What is a P/E ratio ? What might account for such a high P/E ratio for Netflix? _ _______________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________ _ ______________________________________________________________________________ Yield refers to the cash return on a stock expressed as a percentage of the current market value; AOL and iRobot have no yield because there have been no dividends declared by either company. It is the ratio of the per share per price to the company’s per share earnings used to compare values. The high P/E could mean the anticipation of increased earnings on the part of Netflix, or anticipation of growth in that industry. Div/price = yield; $1.50 divided by $42.66 = 3.5% Boeing (144.57 - 116.32 = 28.25); iRobot (59 cents) Boeing (2.40 div.) PRODUCT PREVIEW Boeing 124.48 123.03 123.08 0.42 87.85B BA 2.92 17.70 6.96 4,081,520 52W HI 48.36 52W L 29.73 Stock iRobot Hi 35.84 Low 35.02 Cls 35.70 Net Chg .59 MrkCap 1B Tkr iRBT Div — Yld % — P/E 34.01 EPS 1.04 Vol 10,443,052
293 THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY
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