Exam 6: Stock Valuation

Winslow Brothers common stock sells for $36.60 a share and pays an annual dividend that increases by 1.8 percent annually.The market rate of return on this stock is 14.7 percent.What is the amount of the last dividend paid?

Based on the dividend growth model,an increase in investors' overall level of required returns will

The total return on a stock is equal to

Duncan Street Mills is an all-equity firm with 28,000 shares of stock outstanding.The firm expects sales of $400,000 next year.Sales are expected to grow by 5 percent for the following 2 years and then level off to a constant 3 percent growth rate.Net cash flow varies in direct proportion to sales and is currently equal to 15 percent of sales.The required return for this firm is 16 percent.What is the estimated current value of one share of stock?

A securities market primarily consisting of dealers who buy and sell for their own inventories is generally referred to as a(n)________ market.

XanEx is a new firm that just paid an annual dividend of $1 a share.The firm plans to increase its dividend by 10 percent a year for the next 4 years and then decrease the growth rate to 2 percent annually.If the required rate of return is 18.25 percent,what is one share of this stock worth today?

The Olde Mill just paid an annual dividend of $.38 a share and plans on decreasing this amount by 1 percent annually.What is the expected dividend for Year 6?

DOC just paid a dividend of $.46 a share.The dividends are expected to increase by 30 percent a year for the next 2 years and then increase by 2 percent annually thereafter.What is the current value of a share if the appropriate discount rate is 15 percent?

The voting procedure where you must control 50 percent plus one of the outstanding shares of stock to guarantee that you will win a seat on the board of directors is called ________ voting.

The owner of preferred stock

What is the primary business of the NYSE?

Nu-Tech stock's last annual dividend was $1.10 a share.Dividends are expected to increase by 15 percent for the next 2 years and then increase at a constant 3 percent annually.The required return is 17.5 percent.What is the current value per share?

Ernst Electrical increases its annual dividend by 1.8 percent annually.The stock commands a market rate of return of 18 percent and sells for $19.07 a share.What is the expected amount of the next dividend?

The voting procedure whereby shareholders may cast all of their votes for one candidate for the board of directors is called ________ voting.

Which one of the following statements concerning preferred stock is correct?

Mario's is going to pay $1,$2.65,and $4 a share over the next 3 years,respectively.After that,the company plans to pay annual dividends of $1.65 per share indefinitely.If your required return is 14 percent,how much are you willing to pay for one share today?

The expected dividend yield is equal to

Last year,Grenville common stock had a rate of return of 15.84 percent,a fixed annual dividend of $2.65 a share,and a dividend yield of 2.7 percent.What was the rate of price appreciation on the stock?

Snider's Hardwoods has a dividend payout ratio of 45 percent,a return on assets of 9.4 percent,and a debt-equity ratio of 0.38.What is the firm's rate of growth?

Denver Wool is owned by a group of shareholders who all vote independently and who all want personal control over the firm.There are three open seats and Danielle is one of six contenders.If straight voting is utilized and Danielle is a current shareholder,then he