Finance 341 Exam 2 Review

Finance 341 Exam 2 Review - Finance 341 Exam 2 Review True...

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Finance 341 Exam 2 Review True Statements: 1. In an amortized loan, the payment of principal is smallest in the first payment and increases with each payment thereafter 2. The value of perpetuity decreases when the required rate of return increases 3. You would rather be invested in an account that pays you interest compounded monthly than in one that pays interest compounded quarterly 4. Founders’ shares are stock owned by the firm’s founders that have sole voting rights but restricted dividends for a specified number of years 5. Common stockholders often have the preemptive right to purchase on a pro rata basis any additional shares sold by the firm. This enables current stockholders to maintain control and protects current stockholders from dilution of stock value 6. people who believe that weak-form market efficiency exists also believe that “chartists” are wasting their time 7. according to the stock valuation model presented in the textbook, the value that an investor assigns to a share of stock is independent of the length of
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This note was uploaded on 07/07/2008 for the course FINC 341 taught by Professor Guyton during the Spring '07 term at Texas A&M.

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Finance 341 Exam 2 Review - Finance 341 Exam 2 Review True...

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