Last week’s question and answer

Based in El Paso, Texas, I’m a leading designer, producer and global marketer of items such as hair dryers, curling irons, women’s shavers, hair accessories, mirrors, foot baths, body massagers, hairstyling products, body powder, skin care products, and tools for kitchens, cleaning, barbecue, barware, storage, organization, garden, trash and cars. My brands include OXO, Good Grips, Brut, Vitalis, Final Net, Ammens, Condition 3-in-1, Skin Milk, TimeBlock, Epil-Stop, Dazey, Caruso, Karina, DCNL, Nandi, Isobel, WaveRage, Hot Spa and Wigo. I rake in more than half a billion dollars annually. Some say I launched a thousand ships. Who am I?

(Answer: Helen of Troy)

Know the answer to this week’s question? Send it to us with Foolish Trivia on the top and you’ll be entered into a drawing for a nifty prize! The address is Motley Fool, Box 19529, Alexandria, Va. 22320-0529. Send questions and your Trivia entries to Fool@fool.com.

Shaky times for Sony

The Sony (NYSE: SNE) brand was once synonymous with high-quality electronics. But it has begun to lag behind competitors. In its recent second-quarter results, Sony reported a net profit of 28.5 billion yen, or approximately $246 million, down 46 percent from a year ago. Sales in Sony’s core electronics unit have been unremarkable recently. Once considered the leader in portable music, Sony’s music products have fallen behind Apple’s iPod, and its other consumer electronics devices haven’t fared much better.

Sony’s computer entertainment division has been its shining star. Strong sales from the PlayStation 2 gaming console have kept Sony from losing too much ground, but with the PS2 reaching the end of its lifespan, and with the hand-held PSP not meeting expectations for earth-shaking sales, Sony needs to pull one hefty rabbit from under its hat. Microsoft just released the Xbox 360 in time for the holiday season, which will give it quite a head start over Sony’s upcoming PlayStation 3.

To turn its business around, Sony needs to restore its premium brand image. Its current cost-saving measures may help free up the resources necessary for that. Furthermore, Sony seems to be taking its time with the PlayStation 3 to develop more of the third-party support that has made its previous two PlayStations such tremendous successes. If it succeeds, with the stock price near a two-year low, this may be the perfect opportunity to buy.

Worthless shares

In February 2004, I bought 1,100 shares of fiber-optic communications company RCN Corp. The firm had some loans at high interest rates that it could not refinance, so it ended up filing for Chapter 11 bankruptcy protection. My stock was deemed worthless, as the firm simply issued new stock. Is it right to assume that if a company wants to raise money, all it has to do is void its stock and issue new shares? – Silas Booker, Spring City, Tenn.

The Fool Responds: When the vast majority of companies emerge from Chapter 11 bankruptcy protection (which is designed to give them a chance to reorganize themselves and turn themselves around), their common stock ends up worthless. That’s because in a bankruptcy, many creditors, such as banks and suppliers and bondholders, take priority over common-stock holders (who often end up with nothing). Firms don’t just file Chapter 11 lightly, though. If they simply wanted more money and didn’t care about diluting the value of existing shares, they could just issue more shares of their existing stock.

Meaning of NAV

What’s a mutual fund’s “NAV”? – Y.N., South Bend, Ind.

NAV stands for “net asset value,” and it’s the per-share value of a mutual fund.

First off, know that mutual fund prices don’t fluctuate during the day. Because funds are composed of many different securities, fund companies wait until the end of trading each day, and then they add up the current market value of all their holdings. They then subtract the fund’s expenses for the day, such as commissions paid. The result is divided by the number of shares of the fund that exist. Voila – the NAV. Learn much more about mutual funds at www.fool.com/funds and www.ici.org.

I read that Google’s “market cap” is $120 billion. What does that mean? – P.G., Lake City, Fla.

A company’s market capitalization reflects the value the stock market is placing on it right now. It can help you get a sense of whether the firm is overvalued or undervalued – if you compare it to peers and others. To get it, you multiply the total number of shares outstanding by the stock price. Google’s market cap tells you that the market has placed a price tag of about $120 billion on the company. That $120 billion is a hefty number, by the way. It’s more than the market cap of either Coca-Cola or PepsiCo (each is around $100 billion), Home Depot ($90 billion), American Express ($65 billion), Yahoo! ($60 billion), Boeing ($55 billion), Walt Disney ($50 billion), McDonald’s ($45 billion) or Federal Express ($30 billion). To compare, Wal-Mart’s market cap is around $200 billion, with General Electric and ExxonMobil battling it out for America’s highest valuation, around $370 billion each.

Valuable lessons from McCarty

Not all great investors are household names. But some, like Oseola McCarty, should be. She was born in Mississippi in 1908 and lived for three-quarters of a century in a small, simple house, washing clothes for a living. Over the years, she continued to put aside whatever money she could, plunking her savings into local banks.

Ten years ago, she decided to give most of her life’s savings to the University of Southern Mississippi. (“I just figured the money would do [scholarship recipients] a lot more good than it would me.”) The impressive sum of $150,000 bowled over school officials, and it was established as the Oseola McCarty Scholarship Fund. It has now given 17 deserving young people a college education.

Miss McCarty’s life imparts valuable lessons.

For starters, a lot can be accomplished by investing small amounts. And, in trying to become our family’s most beloved ancestor or a charitable cause’s most beloved stranger, we should invest effectively. Miss McCarty’s nest egg grew very large, but it would have grown even larger had she been investing in stocks, and not CDs. If she’d bought just a few shares of Wal-Mart or General Electric many years ago, they would have boosted her bottom line considerably.

Her own words are also inspiring: “A smart person plans for the future. You never know what kind of emergency will come up. … You have to take responsibility for yourself. … It wasn’t hard. I didn’t buy things I didn’t need. … The Lord helped me, and he’ll help you, too. … It’s an honor to be blessed like that.”

After Miss McCarty died in 1999, one of her bankers wrote us, saying: “I have often tried to explain to folks that Miss McCarty’s most remarkable feat was living as long as she did. She also found a way to save a little bit of money every week. Time was able to turn even the modest returns of her early investments into hundreds of thousands of dollars. If we had been able to introduce her to [stocks] earlier, she would have left millions instead of thousands.”

For information on her scholarship fund, call (601) 266-5602.