chapter-08-stock-valuation-12

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1. What is the model called that determines the
present value of a stock based on its next annual dividend, the dividend growth
rate, and the applicable discount rate?
A. zero growth
B. dividend growth
C. capital pricing
D. earnings capitalization
E. discounted dividend

2. Which one of the following is computed by dividing
next year’s annual dividend by the current stock price?
A. yield to maturity
B. total yield
C. dividend yield
D. capital gains yield
E. growth rate

3. Which one of following is the rate at which a
stock’s price is expected to appreciate?
A. current yield
B. total return
C. dividend yield
D. capital gains yield
E. coupon rate

4. Which one of the following types of stock is
defined by the fact that it receives no preferential treatment in respect to
either dividends or bankruptcy proceedings?
A. dual class
B. cumulative
C. non-cumulative
D. preferred
E. common

5. A company has two open seats, Seat A and Seat B, on
its board of directors. There are 6 candidates vying for these 2 positions.
There will be a single election to determine the winner of both open seats. As
the owner of 100 shares of stock, you will receive one vote per share for each
open seat. You decide to cast all 200 of your votes for a single candidate.
What is this type of voting called?
A. democratic
B. cumulative
C. straight
D. deferred
E. proxy

6. You want to be on the board of directors of Wisely
Foods. Since you are the only shareholder that will vote for you, you will need
to own more than half of the outstanding shares of stock if you are to be
elected to the board. What is the type of voting called that requires this
level of stock ownership to be successfully elected under these
conditions?
A. democratic
B. cumulative
C. straight
D. deferred
E. proxy

7. You cannot attend the shareholder’s meeting for
Alpha United so you authorize another shareholder to vote on your behalf. What
is the granting of this authority called?
A. altering
B. cumulative voting
C. straight voting
D. indenture agreement
E. voting by proxy

8. What are the distributions to shareholders by a
corporation called?
A. retained earnings
B. net income
C. dividends
D. capital payments
E. diluted profits

9. Which one of the following is a type of equity
security that has a fixed dividend and a priority status over other equity
securities?
A. senior bond
B. debenture
C. warrant
D. common stock
E. preferred stock

10. Callander Enterprises stock is listed on NASDAQ.
The firm is planning to issue some new equity shares for sale to the general
public. This sale will occur in which one of the following markets?
A. private
B. auction
C. exchange floor
D. secondary
E. primary

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