Combined Communications is a new firm in a rapidly growing industry. The
company is planning on increasing its annual dividend by 15 percent a year for
the next 4 years and then decreasing the growth rate to 3.5 percent per year.
The company just paid
Free Motion Enterprises paid a $2.20 per share annual dividend last week.
Dividends are expected to increase by 3.75 percent annually. What is one
share of this stock worth to you today if your required rate of return is 15
Langley Enterprises pays a constant dividend of $0.85 a share. The company
announced today that it will continue to pay the dividend for another 2 years
after which time all dividends will cease. What is one share of this stock worth
today if the requ
You are the sole shareholder of a small corporation. Presently, you wish to
diversify your holdings and thus want to sell a portion of your shares but do not
want to incur the costs associated with SEC filings. Which one of the following
markets, if a
The preferred stock of Rail Lines, Inc., pays an annual dividend of $12.25 and
sells for $59.70 a share. What is the rate of return on this security?
A. 19.38 percent
B. 19.63 percent
C. 20.52 percent
D. 20.72 percent
E. 20.84 percent
R = $12.25/$59.7
If a firm accepts Project A it will not be feasible to also accept Project B
because both projects would require the simultaneous and exclusive use of the
same piece of machinery. These projects are considered to be:
105. Springboro Tech is a young start-up company. No dividends will be paid on the
stock over the next 15 years, because the firm needs to plow back its earnings
to fuel growth. The company will pay a $15 per share dividend in 16 years and
will increase t
A company has two open seats, Seat A and Seat B, on its board of directors.
There are 6 candidates vying for these 2 positions. There will be a single
election to determine the winner of both open seats. As the owner of 100
shares of stock, you will re
Roy's Welding Supplies common stock sells for $38 a share and pays an
annual dividend that increases by 3 percent annually. The market rate of return
on this stock is 8.20 percent. What is the amount of the last dividend paid?
The person on the floor of the NYSE who executes buy and sell orders on
behalf of customers is called a(n):
A. floor trader.
E. commission broker.
Refer to section 8.3
110. Southern Utilities just issued some new preferred stock. The issue will pay a
$19 annual dividend in perpetuity beginning 9 years from now. What is one
share of this stock worth today if the market requires a 7 percent return on this
Callander Enterprises stock is listed on NASDAQ. The firm is planning to issue
some new equity shares for sale to the general public. This sale will occur in
which one of the following markets?
C. exchange floor
Which one of the following statements is correct concerning the two-stage
dividend growth model?
A. G1 cannot be negative.
B. Pt = Dt/R.
C. G1 must be greater than G2.
D. G1 can be greater than R.
E. R must be less than G1 but greater than G2.
100. The Stiller Corporation will pay a $3.80 per share dividend next year. The
company pledges to increase its dividend by 2.4 percent indefinitely. How
much are you willing to pay to purchase this company's stock today if you
require a 6.9 percent retur
Home Canning Products common stock sells for $41.00 a share and has a
market rate of return of 12.8 percent. The company just paid an annual
dividend of $1.15 per share. What is the dividend growth rate?
A. 8.29 percent
B. 8.45 percent
C. 9.23 percent
Home Care Providers is paying an annual dividend of $1.10 every other year.
The last dividend was paid two years ago. The firm will continue this policy until
3 more dividend payments have been paid. One year after the last dividend
normal payment, th