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Chapter 14, Problem 2P
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To calculate: Stock price after the splitting 3 for 2 stocks.

Stock split: When a company has large number of outstanding shares, then the board of directors decided to issue more shares to current shareholders, which resulted in decreasing the number of outstanding shares and increasing the shares prices.

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3 years ago, you invested $6,700. In 5 years, you expect to have $12,201. If you expect to earn the same annual return after 5 years from today as the annual return implied from the past and expected values given in the problem, then in how many years from today do you expect to have $25,254?
4 years ago, you invested $3,600. In 2 years, you expect to have $7,201. If you expect to earn the same annual return after 2 years from today as the annual return implied from the past and expected values given in the problem, then in how many years from today do you expect to have $10,022? Input instructions: Round your answer to at least 2 decimal places. years
Since ROE can sometimes be boosted artificially through financial leverage, do you think it would be more beneficial for investors to rely on a combination of ROE and other financial health indicators, such as the debt-to-equity ratio or interest coverage ratio, when assessing a stock's long-term potential?
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