Test Assessment 2

 Essay about Test Assessment 2

Chapter some The Value of Common Stocks

Multiple Choice Questions

1 . In case the Vol. hundreds is reported as 12, 233 in the Wall Street Journal quote, then the trading volume for this day of trading is usually: A)10, 233 shares

B)102, 330 stocks

C)1, 023, 300 stocks and shares

D)10, 233, 000 stocks and shares

Answer: C

Type: Method

Page: sixty

Response: Trading volume = 10, 233 * 90 = you, 023, 300

2 . The dividend yield reported as Yld. % in The Wall Street Journal quotation is calculated the following: A)(dividends / hi)

B)(dividends / lo)

C)(dividends as well as close)

D)None of the above

Answer: C

Type: Method

Page: 70

3. The Wall Street Journal quotation for a firm has the pursuing values: Div: 2 . 28, PE: 19, Close: seventy five. 30. Calculate the gross pay out ratio for the business. A)58%



D)None of the over

Answer: A

Type: Hard

Page: 70

Response: EPS = (75. 30)/19 = 3. 9631 dividend payment = installment payments on your 28/3. 9631 = zero. 5753= 58%

5. If the Wall Street Journal Quotation to get a company has the following values close: 26. 00; Net chg: =+1. 00; then this closing cost for the stock for the previous trading day was? A)$26



D)None in the above.

Answer: B

Type: Medium

Web page: 60

Response: Previous concluding = present closing net chg. sama dengan 26. 00-1. 00= $25. 00

your five. The value of a common stock today depends on:

A)Number of shares outstanding plus the number of investors B)The Stock market analysts

C)The expected upcoming dividends and the discount rate D)Present value of the future income per share

Answer: C

Type: Easy

Page: sixty two

6th. Super Laptop Company's share is selling for $22.99 per discuss today. It really is expected that the stock are going to pay a dividend of five dollars every share, and then be people paid $120 every share at the end of one 12 months. Calculate the expected price of returning for the shareholders. A)20%




Solution: B

Type: Easy

Site: 62

Response: r = (120+5-100)/100 = 25%

7. LAPTOP OR COMPUTER Company stockholders expect to receive a year-end gross of $12 per talk about and then become sold for $122 dollars per share. In the event the required charge of come back for the stock is definitely 20%, precisely what is the current value of the share? A)$100




Answer: D

Type: Channel

Page: 62

Response: S = (122+10)/1. 2 = 110

8. Macrohard Company expects to shell out a dividend of $6 per reveal at the end of year one particular, $8 per share by the end of year two after which be sold for $136 per share. In case the required price for the share is twenty percent, what is the existing value in the stock? A)$100




Solution: B

Type: Medium

Web page: 62

Response: P = (6/1. 2)+(8+136)/(1. 2^2) = 105

9. The constant gross growth method P0 = D1/(r-g) assumes: A)The payouts are developing at a continuing rate g forever. B)r > g

C)g will certainly not be negative.

D)Both A and B

Solution: D

Type: Medium

Page: 64

10. Casino Co. is expected to pay out a gross of $6 per discuss at the end of year a single and these kinds of dividends are expected to develop at a continuing rate of 8% each year forever. If the required price of returning on the inventory is twenty percent, what is current value with the stock today? A)$30




Answer: W

Type: Method

Page: sixty four

Response: L = (6/(0. 2-0. 08) = 55

11. WorldTour Co. has just now paid out a...