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You are a shareholder in Modul Financial Advisory. The corporation has earnings per share of EUR this year. The corporate tax rate is % and your tax rate on dividend income is . How high is your income after tax and how much tax does the corporation and you have to pay together in total?
Read the following 5 statements and decide which of them are TRUE:
You are an investor of Pepper Corp who recently released their annual report. From the income statement you can see that the company has achieved a net income of EUR million. The book value of equity is EUR million. The company’s Debt-Equity Ratio is . The current interest rate for debt payments is . Compute both the ROA (Return on Asset) and ROE (Return on Equity) and express them in Percentages.
What is the market capitalization of a stock with a share price of EUR and shares outstanding of million? (in million)
Assume that there are two stocks that have the following payouts next year depending on the development of the economy with equal probability:
| Weak Economy | Strong Economy | |
| Stock A | EUR | EUR |
| Stock B | EUR | EUR |
The share price for stock A is EUR . Furthermore there is a risk-free zero-coupon bond that pays EUR , with a coupon of %. What are the price, expected return and risk premium for stock B?
You are working for a shipping company and consider buying a new truck. The price of the truck is EUR . Maintenance cost are EUR per year. Annual Fuel cost are estimated to be EUR and the insurance premium for the truck will be EUR per year. The truck is going to be used for the next 5 years. You are unsure about the revenue prospects and have identified two scenarios.
| Scenario | t=1 | t=2 | t=3 | t=4 | t=5 |
|---|---|---|---|---|---|
| Good | |||||
| Bad |
The chance for the good scenario to realize is %. What are the expected cash flows of the truck over the next 5 years?
At the end of last year Sugar Inc. had a share price of EUR and million shares outstanding. The book value of equity according to the annual report was EUR million and the firm had cash of EUR million. How high was the market-to-book ratio? What type of stock is Sugar Inc.?
What is the result for the market maker, if you buy and immediately sell stocks of SAP, when the bid price is EUR and the ask price is EUR .