FIN hw - B - Which of the following is true if a company...

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Sheet1 Page 1 B - Which of the following is true if a company misses a dividend payment on cumulative preferred stock? a. The current preferred stock dividend payment must be made before a common stock dividend payment can be made. b. The current common stock dividend payment must be made before a preferred stock dividend payment can be made. c. The current and past missed preferred stock dividend payments must be made before a common stock dividend payment c a d. None of the above is true. D - WRONG Valuing a common stock that expects no growth rate in its future dividends is the same as valuing a _________. a. zero coupon bond. b. coupon bond c. preferred stock d. perpetuity e. Both C and D D - Krustyburger just paid a dividend of $2 and has a required return of 15%. Which of the following equations represent's today's a. $2/[0.15 - 0.10] b. $2(1.10)/0.15 c. $2/0.15 d. $2(1.10)/[0.15-0.10] C - Which of the following measures the expected capital gains yield for a constant growth stock? a. The current dividend divided by the stock price.
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This note was uploaded on 05/05/2010 for the course ECONMOICS ECON 203 taught by Professor Josephpetry during the Spring '10 term at University of Illinois, Urbana Champaign.

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