1. Kristy Nguyen is trying to decide between two different stock investments, and she asks for…

1. Kristy Nguyen is trying to decide between two different stock investments, and she asks for your help. Information about each investment is below. Company Price per share Annual Dividend After-Tax Income This Year Projected Earnings Next Year Number of Shares Outstanding One Source Manufacturing $24 $0.40 $35 million $39 million 20 million shares Down South Homes $40 $0.56 $122 million $90 million 140 million shares

 a. Calculate the dividend yield for each company.

b. Calculate the earnings per share for each company.

 c. Calculate the price-earnings (P/E) ratio for each company.

 d. Based on this information, which company would you recommend?

2. Four years ago, David Robertson purchased 200 shares of Harrison Microchips. At the time, each share of Harrison Microchips was selling for $40. He also paid a $22 commission when the shares were purchased. Now, four years later, he has decided it’s time to sell his investment. Harrison Microchips share price when sold was $52.50. In addition, he paid a $34 commission to sell his shares. He also received dividends of $2.20 per share over the four-year investment period.

 a. What was the total return for Mr. Robertson’s investment?

b. What is the annualized holding yield for his investment?