chap7

Economics of Money, Banking and Financial Markets, The (9th Edition)

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Economics of Money, Banking, and Financial Markets, 8e (Mishkin) Chapter 7 7.1 Computing the Price of Common Stock   1) 
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Stockhold ers are residual claimants, meaning that they  A) 
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have the first  priority claim on all of a company's assets.  B) 
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are liable for all  of a company's debts.  C) 
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will never share  in a company's profits.  D) 
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receive the  remaining cash flow after all other claims are paid.  Answer:  
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Ques Status: Revised    2) 
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stockholder's ownership of a company's stock gives her the right to  A) 
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vote and be the  primary claimant of all cash flows.  B) 
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vote and be the  residual claimant of all cash flows.  C) 
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manage and  assume responsibility for all liabilities.  D) 
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vote and  assume responsibility for all liabilities.  Answer:  
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Ques Status: Revised    3) 
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Periodic  payments of net earnings to shareholders are known as  A) 
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capital gains.  B) 
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dividends.  C) 
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profits.  D) 
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interest.  Answer:  
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Ques Status: Revised    4) 
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The value  of any investment is found by computing the   A) 
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present value of  all future sales.  B) 
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present value of  all future liabilities.  C) 
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future value of  all future expenses.  D) 
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present value of  all future cash flows.  Answer:  
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Ques Status: Revised    5) 
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In the  one - period valuation model, the value of a share of stock depends upon  A) 
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the present  value of both dividends and the expected sales price.  B) 
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only the present  value of the future dividends.  C) 
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the actual value  of the dividends and expected sales price received in one year.  D) 
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the future value  of dividends and the actual sales price.  Answer:  
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This document was uploaded on 06/23/2011.

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chap7 - Economics of Money, Banking, and Financial Markets,...

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