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1.
A company's dividend yield is calculated by _______.
Dividing annual dividend per share by stock price per share.
2.
A company's price/sales ratio is its stock price divided by _______.
Sales per share. Since we are using stock price, we must also use sales per share.
3.
A company's gross margin is calculated by dividing _______.
Gross profits by revenues.
4.
Earnings per share (EPS) is a metric that should not be used in isolation.
True. As with other financial ratios, you should use EPS along with other metrics.
5.
Companies in which of the following industries would likely have the lowest price/book ratios?
Utilities. The lowest price/book ratios are found in capital-intensive industries, such as utilities.
6.
A company's market capitalization is calculated by _______.
Multiplying its stock price by the number of shares outstanding. For example, if there are a million shares of stock trading at $10 per share, the market capitalization is $10 million.
7.
If a company has earned $1.50 per share and its share price is $30, what is its P/E?
20. The P/E is determined by dividing the price per share ($30) by the earnings per share ($1.50), yielding a P/E of 20 in this case.
8.
A stock's price/cash flow ratio is calculated by dividing the stock price by the _______.
