Fin 420 week 4 personal finance quiz

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1 As a stockholder of Kentucky Gas and Oil, you receive its annual report. In the financial statements, the firm reported after-tax earnings of $1,200,000 and has issued 1,500,000 shares of common stock. The stock is currently selling for $24 a share. What is the per earnings share for Kentucky Gas and Oil? 2 Sarah and James Hernandez purchased 150 shares of Cisco Systems stock at $18 a share. One year later, they sold the stock for $25.40 a share. They paid a broker a $32 commission when they purchased the stock and a $40 commission when they sold the stock. During the 12-month period the couple owned the stock, Cisco Systems paid dividends that totaled $0.24. Calculate the Hernandezes’ total return for this investment. 3 As a stockholder of Kentucky Gas and Oil, you receive its annual report. In the financial statements, the firm reported after-tax earnings of $1,200,000 and has issued 1,500,000 shares of common stock. The stock is currently selling for $24 a share. What is the price-earnings (PE) ratio for Kentucky Gas and Oil? 4 For four years, Marty Campbell invested $4,000 each year in Newsome Golf Apparel. The stock was selling for $32 in 2008, $45 in 2009, $35 in 2010, and $50 in 2011. After four years, how many shares does Marty own? 5 Jan Throng invested $24,000 in the Invesco Charter Mutual Fund. The fund charges a 5.50 percent commission when shares are purchased. Calculate the amount of commission Jan must pay. 6 Betty and James Holloway invested $52,000 in the Financial Vision Social Responsibility Fund. The management fee for this fund is 0.60 percent of the total asset value. Calculate the management fee the Holloways must pay. 7 For four years, Marty Campbell invested $4,000 each year in Newsome Golf Apparel. The stock was selling for $32 in 2008, $45 in 2009, $35 in 2010, and $50 in 2011. What is Marty’s total investment in Newsome Golf?


8 Wallace Davis purchased 200 shares of Dell stock at $14.50 a share. One year later, he sold the stock for $11 a share. He paid his broker a $22 commission when he purchased the stock and a $24 commission when he sold it. During the 12 months he owned the stock, the company paid no dividends. Calculate Wallace’s total return on this investment.


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