You are watching: Which of the following statements concerning the required rate of return on stocks is true?
Cumulative desired stockA) has a ideal to vote cumulatively.B) requires dividends in arrears to be lugged over into the following duration.C) has actually a claim to dividends before bonds.D) has actually a higher forced rerotate than prevalent stock.
Bensen Co. passist a dividfinish of $5.25 on its prevalent stock yesterday. The company"s dividends are meant to flourish at a constant rate of 8.5% indefinitely. If the required rate of rerotate on this stock is 15.5%, compute the current worth per share of Bensen Co. stock.A) $76.43 B) $43.90 C) $81.38 D) $56.23
Waterfront Solutions, Inc. phelp a dividfinish of $5.00 per share on its prevalent stock yesterday. Dividends are supposed to grow at a consistent rate of 4% for the next two years, at which point the stock is supposed to sell for $56.00. If investors require a price of return on Waterfront"s widespread stock of 18%, what have to the stock market for today?A) $40.22 B) $50.22 C) $44.76 D) $48.51
Asymmetric Frames Corp had a rerotate on equity of 15%. The corporation"s income per share was $6.00, its dividend payout proportion was 40% and its profit-retention price was 60%. If these relationships continue, what will be United Financial Corp"s inner expansion rate?A) 9.0% B) 8.6% C) 15.6% D) 6.0%
Which of the complying with statements concerning the required rate of rerotate on stocks is true?A) the greater an investor"s compelled rate of rerotate, the greater the value of the stockB) the greater the danger, the better the forced return, other points being equalC) The required rerevolve on wanted stock is primarily higher than the compelled rerotate on prevalent stock.D) If hazard is lessened, the required return will decrease bereason even more investors are risk-averse.
Most preferred stocks have actually a attribute that calls for all past unpassist wanted dividfinish payments be passist before any prevalent stock dividends have the right to be phelp. What is the name of this feature?A) provisional B) convertible C) participating D) cumulative
Beaver Corp wanted stock has a market price of $14.50. If it has a ybeforehand dividfinish of $3.50, what is your expected rate of rerevolve if you purchase the stock at its sector price?A) 22.36% B) 19.45% C) 41.43% D) 24.14%
Beaver Corporation stock is currently selling for $58.00. It is meant to pay a dividfinish of $5.00 at the finish of the year. Dividends are meant to flourish at a consistent rate of 7.5% inabsolutely. Compute the required price of rerotate on Beaver Corporation stock.A) 16.12% B) 15.65% C) 13.64% D) 12.48%
You observe Thundering Herd Usual Stock marketing for $40.00 per share. The following dividend is meant to be $4.00, and is expected to thrive at a 5% yearly price forever. If your forced rate of return is 12%, should you purchase the stock?A) no, because the present value of the supposed future cash flows is greater than $40B) no, because the present worth of the expected future cash flows is less than $40C) yes, because the current value of the supposed future cash flows is greater than $40D) yes, because the current worth of the supposed future cash flows is less than $40
What is the worth of a desired stock that pays a $5.55 dividend to an investor through a compelled rate of rerotate of 10%?A) $55.50 B) $22.22 C) $27.83 D) $45
Maynard Inc. preferred stock pays an yearly dividend of $7 per share. Which of the following statements is true for an investor with a required rerotate of 9%?A) The value of the preferred stock is $77.78 per share.B) The value of the wanted stock is $7 bereason the dividfinish is addressed at $7 each year .C) The value of the preferred stock is $63.00 per share.D) The value of the desired stock is $6.30 per share because of the 9% forced rerevolve.
Using the constant development dividfinish valuation version and also assuming dividends will certainly expansion a continuous rate forever before, the rise in the worth of the stock annually should be equal to the A) dividfinish yield.B) dividend yield plus the resources gains yield.C) compelled return on the stock, rcs.D) expansion rate in dividends, g.
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Preferred stock is comparable to a bond in the adhering to wayA) both contain a growth factor comparable to widespread stock.B) both administer interest payments.C) wanted stock always has a maturity day.D) both investments carry out a stated income stream.
Shackleford Corporation net earnings this year is $800,000. The company primarily retains 35% of net earnings for reinvestment. The company"s prevalent equity currently has a book worth of $5,000,000. They just phelp a dividfinish of $1.37, and also the required rate of return on this stock is 12%. Compute the value of this stock if dividends are expected to proceed prospering inabsolutely at the company"s interior expansion price.A) $11.42 B) $15.63 C) $4.35 D) $22.61
Online Learning Center to acfirm Essentials of Investments8th EditionAlan J. Marcus, Alex Kane, Zvi Bodie