1/ A firm has $3,430,000 in its common stock account and $34,300,000 in its paid

Q: 1/ A firm has $3,430,000 in its common stock account and $34,300,000 in its paid

1) C. $7 per share Par value of the common stock = Common stock / Number of shares outstanding = $3,430,000 / 490,000 shares = $7 per share 2) C. $102.00 Stock price = EPS × P/E ratio = $6 × 17 = $102 3) B. $203,000 Free cash flow = Cash Flow From Operating Activities - Capital Expenditures + Dividends = $213,000 - $44,000 + $34,000 = $203,000

ID: 2335118 • Letter: 1

Question

1/ A firm has $3,430,000 in its common stock account and $34,300,000 in its paid-in capital account. The firm issued 490,000 shares of common stock. What is the par value of the common stock?

$6 per share

$77 per share

$7 per share

$70 per share

2/ A firm with earnings per share of $6 and a price-earnings ratio of 17 will have a stock price of

$4.00

$23.00

$102.00

the market assigns a stock price independent of EPS and the P/E ratio.

3/ Given the following, what is free cash flow?

$135,000.

$203,000.

$247,000.

$257,000.

Cash flow from operating activities $213,000 Capital expenditures 44,000 Dividends 34,000

Explanation / Answer

1) C. $7 per share

Par value of the common stock = Common stock / Number of shares outstanding = $3,430,000 / 490,000 shares = $7 per share

2) C. $102.00

Stock price = EPS × P/E ratio = $6 × 17 = $102

3) B. $203,000

Free cash flow = Cash Flow From Operating Activities - Capital Expenditures + Dividends = $213,000 - $44,000 + $34,000 = $203,000

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1/ A firm has $3,430,000 in its common stock account and $34,300,000 in its paid

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