Test 2 (Chapters 7
and 8)
March 10, 2006
FIN 3250
Section 1
MWF 1:102:00
Spring 2006
•
Closed book, notecard
allowed
•
Calculator required
•
50 minutes allowed
•
100 points total
•
For each multiple choice
question, circle the choice
that best answers the
question.
Circle only one
answer for each question
•
To get credit for
problems
,
you
must
show your work.
This means showing your
calculations or showing
everything that you entered in
your calculator.
Name
______________
_______
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View Full DocumentMultiple Choice Questions
1. (4 points) If ABC Corporation has 10 million shares outstanding and the price of ABC
Corporation stock is $10 per share, what is all of the equity of ABC Corporation worth?
a.
$1 billion
b.
$100 million
c.
$10 million
d.
$1 million
2. (4 points) The next dividend payment by GUM (to be paid one year from today) is $3.
If dividends are expected to maintain a 5% growth rate, and the stock currently sells for
$30 per share, what is the required return (r)?
a.
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