chap05 - You are trying to value some preferred shares that...

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Sheet1 Page 1 You are trying to value some preferred shares that will pay a $4 annual dividend one year from today. The required rate of ret u a. $3.60 b. $36.36 c. $40.36 d. none of the above status: not answered () correct: b your answer: -------------------------------------------------------------------------------- 2 ChangeUp Corporation anticipates that it will grow at a 10% rate next year and then settle in at a perpetual rate of 5% there a a. $78.33 b. $73.33 c. $66.67 d. none of the above status: not answered () correct: b your answer: -------------------------------------------------------------------------------- 3 You own a common stock that just paid an annual dividend of $6. The firm expects to grow at a 4% perpetual rate. If the pric e a. 6.00% b. 9.77% c. 10.00% d. none of the above status: not answered () correct: c your answer: -------------------------------------------------------------------------------- 4 You own a common stock that you expect to pay an annual dividend of $6 one year from now. The firm expects to grow at a a. 6.00% b. 9.77%
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Sheet1 Page 2 c. 10.00% d. none of the above status: not answered () correct: c your answer: -------------------------------------------------------------------------------- 5 Which type of investor is generally regarded as the residual claimant of the firm? a. debt investor b. common equity investor c. preferred equity investor d. all of the above status: not answered () correct: b your answer: -------------------------------------------------------------------------------- 6 You know that the price of a preferred share is $36.36 and you also know that the required rate of return on the share is 11% a. $3.00 b. $3.25 c. $3.75 d. $4.00 status: not answered () correct: d your answer: -------------------------------------------------------------------------------- 7 You know that the price of a preferred share is $36.36 and you know that it pays an annual dividend of $4. What is the requ i r a. 10% b. 11% c. 12% d. 13%
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Sheet1 Page 3 status: not answered () correct: b your answer: -------------------------------------------------------------------------------- 8 Which of the following investors has the right to vote on important corporate decisions? a. debt investors
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This note was uploaded on 08/26/2011 for the course ECON 515 taught by Professor John during the Spring '11 term at American University of Kuwait.

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chap05 - You are trying to value some preferred shares that...

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