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Quiz3practice - Baruch College Finance 3610 Professor J...

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Baruch College Professor J. Wang Finance 3610 Spring 2005 Quiz 3 (Practice Problems) 1 The rate at which the stock price is expected to appreciate (or depreciate) is the: a. Current yield. b. Total yield. c. Dividend yield. d. Capital gains yield. e. Earnings yield. 2 Common stock valuation requires, among other things, information regarding the: I. Expected dividend growth rate. II. Current dividend payment. III. Par value of the common stock. a. I only b. I and II only c. I and III only d. II and III only e. I, II, and III 3 The payback rule can be best stated as: a. An investment is acceptable if its calculated payback period is less than some prespecified number of years. b. An investment should be accepted if the payback is positive and rejected if it is negative. a. An investment should be rejected if the payback is positive and accepted if it is negative. b. An investment is acceptable if its calculated payback period is greater than some prespecified number of years. 4 To find the we begin by setting the NPV of a project equal to zero. a. payback period b. discounted payback period c. internal rate of return d. profitability index e. average accounting return 5 If Y, Inc. stock closed at $25 and the current quarterly dividend is $0.25 per share, what dividend yield would be reported for the stock in The Wall Street Journal ? a. 1.0% b. 2.0% c. 3.0% d. 4.0% e. 5.0%
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