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  3. question 1a 2 marks please answer the following questions a...

Question: question 1a 2 marks please answer the following questions a...

Question details

Question 1A (2 marks):

Please answer the following questions:

a. What is primary and secondary market? An IPO is undertaken on primary or secondary market? (0.5 mark)

b. What is the essential job of an investment banker? (0.5 mark)

c. Why a stock exchange is called an auction market? (0.5 mark)

d. What are the five basis principles of finance? (0.5 mark)

 

QUESTION 1B (5 marks):

New Age IT Solutions had net profit margin of 0.35 on sales of $5 000 000 during 2020. In addition, the firm’s total assets were $4 500 000, and its debt ratio is 0.45. Required:

a. What was New Age IT Solutions’ return on equity (ROE) in 2020? (2 marks)

b. What was return on assets (ROA) of the company in 2020? (1 mark)

c. Calculate earnings per share (EPS) and price earnings ratio (PE) of the company if it has total shares outstanding of 50,000 with a market price of $85 per share? (2 marks)

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