_ch5_elearn_quiz - Quiz - Intermediate Managerial Fin - FIR...

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Please Note: It is recommended that you save your response as you complete each question. Question 1 (1 point) Save If two firms have the same current dividend and the same expected growth rate, their stocks must sell at the same current price or else the market will not be in equilibrium. a) True b) False Question 2 (1 point) Save A proxy fight involves a battle by a shareholder or group of shareholders who seek to change the investment policy of the firm. If the proxy group is successful, current management retains control of the firm but the proxy group dictates what investments the firm makes. a) True b) False Question 3 (1 point) Save If the expected rate of return on a stock exceeds the required rate, a) The stock is experiencing supernormal growth b) The stock should be sold c) The stock is a good buy d) The company is probably not trying to maximize price per share Question 4 (1 point) Save Which of the following statements is most correct? a) All of the statements are correct b) The constant growth model takes into consideration the capital gains earned on a stock. c) It is appropriate to use the constant growth model to estimate stock value even if the growth rate never becomes constant. d) Two firms with the same dividend and growth rate must also have the same stock price. Question 5 (1 point) Save A stock’s dividend is expected to grow at a constant rate of 5 percent a year. Which of the following statements is most correct? a) The stock’s dividend yield is 5 percent Quiz - Intermediate Managerial Fin - FIR 4440 001 - 20108080652 - The . .. https://elearn.memphis.edu/d2l/lms/quizzing/user/attempt/quiz_attempt_pa. .. 1 of 6 9/28/2010 12:32 AM
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b) The stock’s price one year from now is expected to be 5 percent higher c) All of the statements are correct d) The expected return on the stock is 5 percent a year Question 6 (1 point) Save Which of the following statements is most correct? a) If a market is weak-form efficient this implies that all public information is rapidly incorporated into market prices b) If a market is strong-form efficient this implies that the returns on bonds and stocks should be identical c) None of the answers are correct d) If your uncle earns a return higher than the overall stock market, this means the stock market is inefficient Question 7 (1 point) Save Which of the following statements is most correct?
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This note was uploaded on 10/03/2010 for the course FINANCE 08FB40447 taught by Professor Raymond during the Spring '10 term at University of Manchester.

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_ch5_elearn_quiz - Quiz - Intermediate Managerial Fin - FIR...

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