Exam 7: Valuing Stocks

What should be the stock value one year from today for a stock that currently sells for $35,has a required return of 15%,an expected dividend of $2.80,and a constant dividend growth rate of 7%?

If the liquidation value of a corporation exceeds the market value of the equity,then the:

Which of the following describes a seasoned offering?

What is the expected constant-growth rate of dividends for a stock currently priced at $50,that just paid a dividend of $4,and has a required return of 18%?

Which group of investors is capable of earning consistent,superior profits if financial markets are strong-form efficient?

What is the difference between a fundamental analyst and a technical analyst?

If the dividend yield for year 1 is expected to be 5% based on the current price of $25,what will the year 4 dividend be if dividends grow at a constant 6%?

The dividend discount model should not be used to value stocks in which the dividend does not grow.

What proportion of earnings is being plowed back into the firm if the sustainable growth rate is 8% and the firm's ROE is 20%?

If the stock prices follow a random walk,successive stock prices fluctuate above and below a normal long-run price.

Geothermal Corp.just announced good news: Its earnings have increased by 20%.Most investors had anticipated an increase of 25%.Will Geothermal's stock price increase or decrease when the announcement is made?

Which of the following situations is most likely to occur today for a stock that went down in price yesterday?

If the price of a stock falls on 4 consecutive days of trading,then stock prices:

What stock price reaction would you expect from a firm that unexpectedly raises its dividend permanently and by a substantial amount?

When valuing stock with the dividend discount model,the present value of future dividends will:

According to the semistrong form of market efficiency,when new information becomes available in the market:

Investors are willing to purchase stocks having high P/E ratios because:

Your broker suggests that you can make consistent,excess profits by purchasing stocks on the 20^th of the month and selling them on the last day of the month.If this is true,then:

If the stock prices follow a random walk,successive stock price changes are not related.

Is there a tall order when there are many talented and competitive fundamental analysts?