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# Financial statement analysis - Yi Corporation

Can you help me with these price to book value problems?

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Yi Corporation has no preferred stock and reports the following:

2009
Earnings per share \$1.80
Dividends per share \$0.72
Book Value per share-end of year \$8.62

a. If price-to-book value at the end of 2009 equals 1.00, and return on beginning of year equity is expected to remain constant, then cost of equity (to nearest percent) equals:
A) 15%
B) 21%
C) 24%
D) Not determinable

b. If Yi Corporation had preferred stock outstanding then the earnings per share amount of \$1.80 would be
A) unchanged.
B) cannot be determined.
C) greater than \$1.80.
D) less than \$1.80.

c. Interim financial reports are less _________ than annual financial reports.
A) relevant
B) consistent
C) timely
D) reliable

#### Solution Preview

Question A
Price to book value = 1 = Price/\$8.62
Price = \$8.62
Cost of equity = \$0.72/\$8.62 = 8.35%
NOTE: The correct answer is not in the choices. ...

#### Solution Summary

Yi Corporations for financial statement analysis is examined.

\$2.19