If there is one prayer that you should pray/sing every day and every hour, it is the
LORD's prayer (Our FATHER in Heaven prayer)
It is the most powerful prayer.
A pure heart, a clean mind, and a clear conscience is necessary for it.
- Samuel Dominic Chukwuemeka
For in GOD we live, and move, and have our being. - Acts 17:28
The Joy of a Teacher is the Success of his Students. - Samuel Dominic Chukwuemeka
NOTE: Unless instructed otherwise;
For all financial calculations, do not round until the final answer.
Do not round intermediate calculations. If it is too long, write it to "at least" $5$ decimal places.
Round your final answer to $2$ decimal places.
Make sure you include your unit.
Solve all questions.
Use at least two methods where applicable.
Write the name of any formulas that you use.
Show all work.
For NSC Students For the Questions:
Any space included in a number indicates a comma used to separate digits...separating multiples of three digits from
behind.
Any comma included in a number indicates a decimal point. For the Solutions:
Decimals are used appropriately rather than commas
Commas are used to separate digits appropriately.
(1.) Company A has 2 million shares outstanding and a share price of $9.
Company B has 20 million shares outstanding and a share price of $8.
Company C has 400,000 shares outstanding and a share price of $90.
Which company has the greatest market capitalization?
A. Company B has the greatest market capitalization.
Company B has a higher number of outstanding shares and a lower share price than the other two companies.
B. Company A has the greatest market capitalization.
The ratio of outstanding share to share price is the greatest for company A.
C. Company C has the greatest market capitalization.
The ratio of outstanding share to share price is the greatest for company C.
D. Company B has the greatest market capitalization.
Company B's outstanding shares and share price are in the middle range.
It's safer to choose a moderate number of shares and a moderate share price, rather than go to an extreme.
E. Company C has the greatest market capitalization.
Company C has a lower number of outstanding shares and a higher share price compared to the other two companies.
F. Company A has the greatest market capitalization.
Company A has a realistic amount of outstanding shares and a low share price compared to the other two companies.
Market capitalization = Total Number of Outstanding Shares * Current Share Price
$
\underline{Company\;A} \\[3ex]
Market\;\;cap = 2000000 * 9 \\[3ex]
= \$18,000,000 \\[3ex]
\underline{Company\;B} \\[3ex]
Market\;\;cap = 20000000 * 8 \\[3ex]
= \$160,000,000 \\[3ex]
\underline{Company\;C} \\[3ex]
Market\;\;cap = 400000 * 90 \\[3ex]
= \$36,000,000 \\[3ex]
$
Company B has the greatest market capitalization.
It has a higher number of outstanding shares and a lower share price than the other two companies.
(2.) What is the price you pay for a bond with a face value of $8000 selling at 106 points?
A. It is $8630.
Divide the face value by 106 points.
B. It is $8480.
Divide the face value by 106 points.
C. It is $8310.
Divide the face value by 106 points.
Formulas Used: Mathematics of Finance