MGNT 3125_Chapter 9_reviewquestions

MGNT 3125_Chapter 9_reviewquestions - MGNT 3125 Fall 2010...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
MGNT 3125 Fall 2010 Dr. Amine Khayati Chapter 9 Review questions 1 - The total return on a share of stock has two components: the dividend yield and the capital gains yield. a- true b- false 2 - The value of a share of common stock equals the present value of future…………. . plus the present value of the future ………………. . value of a share. a- dividends; market b- coupon payment; accounting c- dividends; principal d- earnings; market 3 - Unlike the valuation of bonds, the valuation of common stocks is difficult because: a- there are voting rights associated with common stocks b- common stocks are sold and bought on a more transparent market c- the cash flows associated with common stocks are easier to predict d- the cash flows from common stocks have more uncertainty and variability associated with them. 4 - Which of the following is a reason why the valuation of stocks is harder than the valuation of bonds: I- dividend payments are not fixed over time and can change substantially over time II- a share of common stock has neither a maturity date nor a maturity value III- common stock markets are relatively less transparent than bond markets IV- future cash flows on stocks are not known in advance and the valuation is sensitive to estimates in dividend growth rate. a- I and II only b- I , II and III only c- I, II and IV only d- I , II , III, and IV 5 - The stock valuation method that determines the price of a stock by dividing the next period’s dividend by the discount rate less the dividend growth rate is called the: a- stock pricing formula b- capital gain model c- zero growth model d- dividend growth model 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6 - A stock that is assumed to pay a constant dividend for ever is called a ………………. . stock. a- regular b- constant c- zero growth d- fixed 7 - Which of the following is true regarding the dividend growth model? I-
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 11/06/2010 for the course MGNT 3125 taught by Professor Warsi during the Spring '08 term at SPSU.

Page1 / 6

MGNT 3125_Chapter 9_reviewquestions - MGNT 3125 Fall 2010...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online