Question

#13

Stock Quotes You have found the following stock quote for ORF Enterprises, Inc., in the financial pages of today s newspaper. What was the closing price for this stock that appeared in yesterday s paper? If the company currently has 1 million shares of stock outstanding, what was net income for the most recent four quarters?

YTD% r	52 wk Hi	52 wk Lo	Stock	Sym	Div	Yld %	PE	Vol 100s	Last	Net Chg
103.45	55.3	12.68	ORF	ORF	.75	2.5	45	31346	????	5.20

PART A:
Closing price in yesterday s paper: $____________.

PART B:
Net Income for most recent four quarters: $____________.

Answer 1

(a)-Yesterday’s closing price

Current Market Price per share

Dividend Yield = Dividend per share / Current Market Price per share

0.0250 = $0.75 per share / Current Market Price per share

Current Market Price per share = $0.75 per share / 0.0250

Current Market Price per share = $30.00 per share

Yesterday's closing price

Yesterday's closing price = Current Market Price per share – Net Change in share price

= $30.00 per share – $5.20 per share

= $24.80 per share

“Yesterday's closing price will be $24.80”

(b)-Net Income for the most recent four quarters

Earnings per share

Earnings per share = Current market price per share / Price-Earnings (P/E) Ratio

= $30.00 per share / 45 Times

= $0.6666666667 per share

Net Income for the recent four quarters

Net Income = Number of common shares outstanding x Earnings per share

= 1 Million Shares x $0.6666666667 per share

= 1,000,000 x $0.6666666667 per share

= $666,666.67

“The Net Income for the most recent four quarters will be $666,666.67”