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Finance Questions

Finance Questions - Retained Earnings, K, Warrants. See attached file for full problem description.


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a. Chapter 18: 4, 10, and 17
b. Chapter 19: 12 and 13


a. By how much did the company's retained earnings increase?

The retained earnings will increase by net income - dividend. The increase in retained earnings is 820-820X20%=$656 million.

b. With 100 million shares outstanding and a stock price of $50, what was the dividend yield? (Hint: First compute dividends per share.)

The dividend amount is 820X20%=$164 million
Number of shares outstanding is 100 million.
Dividend per share is 164/100=$1.64
Stock price is $50
Dividend yield is 1.64/50=3.28%


P/E = Price/Earnings per Share ...

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