Question 1

An increase in PVGO will almost always coincide with a decrease in dividends.

Accepted Answer

A) True 
 B)False

Question 2

Dividend growth rate for a stable firm can be estimated as:

Accepted Answer

A)  Plow back rate/the return on equity (RO
E)  
B)  Plow back rate * the return on equity (RO
E)  
C)  Plow back rate + the return on equity (RO
E)  
D)  Plow back rate - the return on equity (RO
E)  
A)  Plow back rate/the return on equity (RO
E)  
B)  Plow back rate * the return on equity (RO
E)  
C)  Plow back rate + the return on equity (RO
E)  
D)  Plow back rate - the return on equity (RO
E)

Question 3

World-Tour Co. has just now paid a dividend of $2.83 per share (D0); the dividends are expected to grow at a constant rate of 6% per year forever. If the required rate of return on the stock is 16%, what is the current value on stock, after paying the dividend?

Accepted Answer

A)  $30 
B)  $56 
C)  $70 
D)  $48 
A)  $30 
B)  $56 
C)  $70 
D)  $48

Question 4

Michigan Co. is currently paying a dividend of $2.00 per share. The dividends are expected to grow at 20% per year for the next four years and then grow 6% per year thereafter. Calculate the expected dividend in year 5.

Accepted Answer

A)  $4.15 
B)  $2.95 
C)  $4.40 
D)  $3.81 
A)  $4.15 
B)  $2.95 
C)  $4.40 
D)  $3.81

Question 5

If the Wall Street Journal Quotation for a company has the following values close: 55.14; Net chg: = + 1.04; then the closing price for the stock for the previous trading day was?

Accepted Answer

A)  $56.18 
B)  $54.10 
C)  $55.66 
D)  None of the above. 
A)  $56.18 
B)  $54.10 
C)  $55.66 
D)  None of the above.

Question 6

The following are foreign companies that are traded on the New York Stock Exchange:
I. Toyota, II) Brasil Telecom,
III. Nokia,
IV. Endesa, V) General Electric

Accepted Answer

A)  I, II and III only 
B)  I,II, III and IV only 
C)  I,II,III and V only 
D)  All of the given companies are foreign companies 
A)  I, II and III only 
B)  I,II, III and IV only 
C)  I,II,III and V only 
D)  All of the given companies are foreign companies

Question 7

The New York Stock Exchange is the only stock market in the US.

Accepted Answer

A) True 
 B)False

An increase in PVGO will almost always coincide with a decrease in dividends.

Dividend growth rate for a stable firm can be estimated as:

World-Tour Co. has just now paid a dividend of $2.83 per share (D0); the dividends are expected to grow at a constant rate of 6% per year forever. If the required rate of return on the stock is 16%, what is the current value on stock, after paying the dividend?

Michigan Co. is currently paying a dividend of $2.00 per share. The dividends are expected to grow at 20% per year for the next four years and then grow 6% per year thereafter. Calculate the expected dividend in year 5.

If the Wall Street Journal Quotation for a company has the following values close: 55.14; Net chg: = + 1.04; then the closing price for the stock for the previous trading day was?

The following are foreign companies that are traded on the New York Stock Exchange: I. Toyota, II) Brasil Telecom, III. Nokia, IV. Endesa, V) General Electric

The New York Stock Exchange is the only stock market in the US.

Goals and Governance of the Firm

How to Calculate Present Values

Valuing Bonds

Net Present Value and Other Investment Criteria

Making Investment Decisions With the Net Present Value Rule

Introduction to Risk and Return

Portfolio Theory and the Capital Asset Pricing Model

Risk and the Cost of Capital

Project Analysis

Investment, Strategy, and Economic Rents

Agency Problems, Compensation, and Performance Measurement

Efficient Markets and Behavioral Finance

An Overview of Corporate Financing

How Corporations Issue Securities

Payout Policy

Does Debt Policy Matter

How Much Should a Corporation Borrow

Financing and Valuation

Understanding Options

Valuing Options

Real Options

Credit Risk and the Value of Corporate Debt

The Many Different Kinds of Debt

Leasing

Managing Risk

Managing International Risks

Financial Analysis

Financial Planning

Working Capital Management

Mergers

Corporate Restructuring

Governance and Corporate Control Around the World

Filters

Exam 4: The Value of Common Stocks

An increase in PVGO will almost always coincide with a decrease in dividends.

Dividend growth rate for a stable firm can be estimated as:

World-Tour Co. has just now paid a dividend of $2.83 per share (D0); the dividends are expected to grow at a constant rate of 6% per year forever. If the required rate of return on the stock is 16%, what is the current value on stock, after paying the dividend?

Michigan Co. is currently paying a dividend of $2.00 per share. The dividends are expected to grow at 20% per year for the next four years and then grow 6% per year thereafter. Calculate the expected dividend in year 5.

If the Wall Street Journal Quotation for a company has the following values close: 55.14; Net chg: = + 1.04; then the closing price for the stock for the previous trading day was?

The following are foreign companies that are traded on the New York Stock Exchange: I. Toyota, II) Brasil Telecom, III. Nokia, IV. Endesa, V) General Electric

The New York Stock Exchange is the only stock market in the US.

Goals and Governance of the Firm

How to Calculate Present Values

Valuing Bonds

Net Present Value and Other Investment Criteria

Making Investment Decisions With the Net Present Value Rule

Introduction to Risk and Return

Portfolio Theory and the Capital Asset Pricing Model

Risk and the Cost of Capital

Project Analysis

Investment, Strategy, and Economic Rents

Agency Problems, Compensation, and Performance Measurement

Efficient Markets and Behavioral Finance

An Overview of Corporate Financing

How Corporations Issue Securities

Payout Policy

Does Debt Policy Matter

How Much Should a Corporation Borrow

Financing and Valuation

Understanding Options

Valuing Options

Real Options

Credit Risk and the Value of Corporate Debt

The Many Different Kinds of Debt

Leasing

Managing Risk

Managing International Risks

Financial Analysis

Financial Planning

Working Capital Management

Mergers

Corporate Restructuring

Governance and Corporate Control Around the World

Filters