How is eps calculated and why is important for investors

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Question 1: Briefly explain what you understand by Earnings per share (EPS). How is EPS calculated and why it is important for investors to gauge the value of a share?

Question 2: Why do firms buy back the shares from investors? What do they gain? Briefly explain the economics of such a decision and its effects on value of a firm.

Question 3: What are price earnings (PE) ratios?

Question 4: What is the meaning of cost of equity? Who pays this cost of equity and to whom? How do you calculate the cost of equity.

Question 5: What is a bond? Who issues bonds and why? Who buys bonds and why? .

Question 6: What determines the value of a bond? Write down the formula for determining the price of the bond and explain it briefly.

Reference no: EM132498880

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