Equity markets and stock valuation 1.
Part 1 The dividend yield increases as _____.
EARNINGS PER SHARE INCREASE
EARNINGS PER SHARE DECREASE
THE STOCK PRICE INCREASES
the stock price decreases
2.
Part 1 Which are rights of common stockholders?
Check all that apply:
THE RIGHT TO A SHARE OF DIVIDENDS PAID
THE RIGHT TO RECEIVE REGULAR DIVIDENDS
THE RIGHT TO VOTE FOR MEMBERS OF THE BOARD OF DIRECTORS
THE RIGHT TO VOTE ON MAJOR DECISIONS AT THE ANNUAL GENERAL MEETING
3.
Part 1 Preferred stock is like long-term debt since both _____, but preferred stock also resembles equity since both _____.
MAKE REGULAR, FIXED PAYMENTS; DON’T GUARANTEE DIVIDEND PAYMENTS
RANK ABOVE COMMON STOCK IN THE PRIORITY OF CLAIMS; GRANT VOTING RIGHTS TO THE STOCKHOLDER
ARE TAX-DEDUCTIBLE EXPENSES FOR THE FIRM; HAVE NO DEFINITE MATURITY DATE
HAVE A FINITE MATURITY DATE; HAVE UNLIMITED UPSIDE POTENTIAL
4.
Part 1 The NYSE is an _____ and NASDAQ is a _____.
EXCHANGE; DEALER MARKET
OVER-THE-COUNTER MARKET; DEALER MARKET
EXCHANGE; BROKER MARKET
OVER-THE-COUNTER MARKET; BROKER MARKET
5.
Part 1 The dividend growth model is based on the assumption that _____.
DIVIDENDS GROW AT A CONSTANT RATE EVERY PERIOD
DIVIDENDS GROW BY A CONSTANT DOLLAR AMOUNT EVERY PERIOD
DISCOUNT RATES GROW AT A CONSTANT RATE EVERY PERIOD
STOCK PRICES GROW BY A CONSTANT AMOUNT EVERY PERIOD
6.
Part 1 The P\/E ratio measures
THE PRICE EQUIVALENT OF $1 OF EARNINGS
THE GROWTH RATE OF DIVIDENDS
THE PRICE AN INVESTOR PAYS FOR $1 OF EARNINGS
THE EXPECTED CAPITAL GAIN
7.
Intro You find the following quotation for a stock:
Stock (ticker)
Div
Yld%
PE (ttm)
High (ttm)
Low (ttm)
Volume (100)
Last
Change
AAPL
2.92
1.56
18.17
202.15
171.89
29,204
188.22
4.98
Part 1 What was the most recent stock price? <\/p>\n
Part 2 What was the close price on the day before the one reported in the table? <\/p>\n
8.
Intro You bought a share of stock for $100. It is now worth $104 and has just paid an annual dividend of $3 per share.
Part 1 What was the dividend yield? <\/p>\n
Part 2 What was the capital gains yield? <\/p>\n
Part 3 What was the total rate of return? <\/p>\n
Intro Samsung has preferred stock outstanding with a constant annual dividend of $1.7 that is promised forever. Samsung has a required return of 10%.
Part 1 What is the value of Samsung’s preferred stock? <\/p>\n
10.
Intro Forever 21 is expected to pay an annual dividend of $4 per share in one year, which is then expected to grow by 3% per year. The required rate of return is 14%.
Part 1 What is the stock’s value? <\/p>\n
11.
Intro A stock just paid an annual dividend of $5. The dividend is expected to grow by 3% per year for the next 4 years. In 4 years, the P\/E ratio is expected to be 20 and the payout ratio to be 60%.
The required rate of return is 8%.
Part 1 What is the value of the stock? <\/p>\n
12.
Intro Microsoft paid the following annual dividends over the last 5 years:
Year
Dividend
2012
0.34
2013
0.3536
2014
0.3677
2015
0.3825
2016
0.3978
The next dividend is expected 12 months from now.
Part 1 Based on the historical dividends, what is the expected growth rate of dividends? <\/p>\n
13.
Intro IBM has expected earnings per share (EPS) of $0.47 and the industry’s P\/E ratio is 16.
Part 1 What is the value of the stock? <\/p>\n","protected":false},"excerpt":{"rendered":"
Equity markets and stock valuation 1. Part 1 The dividend yield increases as _____. EARNINGS PER SHARE INCREASE EARNINGS PER SHARE DECREASE THE STOCK PRICE INCREASES the stock price decreases 2. Part 1 Which are rights of common stockholders? Check all that apply: THE RIGHT TO A SHARE OF DIVIDENDS PAID THE RIGHT TO RECEIVE […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[13],"class_list":["post-71282","post","type-post","status-publish","format-standard","hentry","category-research-paper-writing","tag-management"],"_links":{"self":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/71282","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/comments?post=71282"}],"version-history":[{"count":0,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/posts\/71282\/revisions"}],"wp:attachment":[{"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/media?parent=71282"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/categories?post=71282"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/papersspot.com\/blog\/wp-json\/wp\/v2\/tags?post=71282"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}