The Retail Analyst at Morgan-Sachs Values Stock of the GAP

question 15

Multiple Choice

The retail analyst at Morgan-Sachs values stock of the GAP at $28.00 per share.They are using the average industry P/E ratio of 15.Their forecasted earnings per share for next year is:

• A)$0.54.
• B)$1.50.
• C)$1.87.
• D)There is not enough information calculate earnings per share.

Discuss the implications of specific stock features, such as cumulative dividends on financial decisions and stockholder rights.

Understand the implication and accounting treatment of stock issued for noncash considerations.

Analyze ethical considerations in financial decision-making, particularly relating to stock repurchase and dividend policies.

Understand the key principles and objectives of different economic systems including capitalism, socialism, and communism.

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Definitions:

Benefits and Costs

The positive outcomes and the negative impacts, respectively, associated with a decision or action.

Interests and Values

Personal preferences and principles that guide an individual's decisions and behavior.

Decision Consequence

The outcome or result that follows from a decision.

Directly Affect

To have an immediate and direct impact or influence on something or someone.