1. How much money do you need to buy 200 shares of Pfizer, Inc. (PFE), which tra
ID: 2778363 • Letter: 1
Question
1.
How much money do you need to buy 200 shares of Pfizer, Inc. (PFE), which trades at $31.40? (Round your answer to 2 decimal places.)
2
How much money do you receive after selling 200 shares of Nokia Corporation (NOK), which trades at $20.13?
3
You would like to buy shares of Sirius Satellite Radio (SIRI). The current ask and bid quotes are $3.96 and $3.93, respectively. You place a market buy order for 500 shares that executes at these quoted prices.
How much money did it cost to buy these shares?
4
You would like to sell 200 shares of Xenith Bankshares, Inc. (XBKS). The current ask and bid quotes are $4.66 and $4.62, respectively. You place a limit sell order at $4.65.
If the trade executes, how much money do you receive from the buyer?
5Problem 8-11 Value of a Preferred Stock (LG8-5)
A preferred stock from Duquesne Light Company (DQUPRA) pays $3.55 in annual dividends.
If the required return on the preferred stock is 6.7 percent, what’s the value of the stock? (Round your answer to 2 decimal places.)
6
Ultra Petroleum (UPL) has earnings per share of $1.56 and a P/E ratio of 32.48.
What’s the stock price? (Round your answer to 2 decimal places.)
Your discount brokerage firm charges $7.95 per stock trade.Explanation / Answer
1.Money needed to buy 200 shares of Pfizer, Inc. (PFE) = (200 shares * $31.40) + $7.95 = $6287.95
2.Money received after selling 200 shares of Nokia Corporation (NOK) = (200 shares * $20.13) - $140 = $3886
3. Money costed to buy shares : Since buy order is placed therefore ask quotes will be applicable = 500 shares * $3.96 = $1980
4. Since limit is placed on sell order of $4.65, trade will be executed only when the price is $4.65
Therefore,money received from the buyer = 200 shares * $4.65 = $930
5.Annual dividend = $3.55
Required return = 6.7%
Therefore, Value of the stock = (3.55*100)/6.7 = $52.99
6. EPS = $1.56
P/E ratio = 32.48
Therefore, stock price = P/E ratio * EPS = 32.48*1.56 = $50.67
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