Finance Chapter 7

What is the name given to the model that computes the present value of a stock by dividing next year’s annual dividend amount by the difference between the discount rate and the rate of change in the annual dividend amount?Stock pricing modelEquity pricing modelCapital gain modelDividend growth modelPresent value model Dividend growth model
The dividend yield is defined as:A) the current annual cash dividend divided by the current market price per share.B) the current annual cash dividend divided by the current book value per share.C) next year’s expected cash dividend divided by the current market price per share.D)next year’s expected cash dividend divided by the current book value per share.E) next year’s expected cash dividend divided by next year’s expected market price per share. C) next year’s expected cash dividend divided by the current market price per share.
Which one of the following types of securities has no priority in a bankruptcy proceeding?Convertible bondSenior debtCommon stockPreferred stockStraight bond Common Stock
Mary owns 100 shares of stock. Each share entitles her to one vote per open seat on the board of directors. Assume there are three open seats in the current election and Mary casts all 300 of her votes for a single candidate. What is the term used to describe this type of voting?ProxyAggregateCumulativeStraightCondensed Cumulative
Kate could not attend the last shareholders’ meeting and thus she granted the authority to vote on her behalf to the managers of the firm. Which one of the following terms is used to describe the method by which Kate’s shares were voted?StraightCumulativeConsent-formProxyIn absentia Proxy
Dividends are best defined as:cash payments to shareholders.cash payments to either bondholders or shareholders.cash or stock payments to shareholders.cash or stock payments to either bondholders or shareholders.distributions of stock to current shareholders. cash or stock payments to shareholders.
Which one of the following generally pays a fixed dividend, receives first priority in dividend payment, and maintains the right to a dividend payment, even if that payment is deferred?Cumulative commonNoncumulative commonNoncumulative preferredCumulative preferredSenior common Cumulative preferred
What is the market called that allows shareholders to resell their shares to other investors?PrimaryProxySecondaryInsideInitial Secondary
A broker is an agent who:trades on the floor of an exchange for himself or herself.buys and sells from inventory.offers new securities for sale to dealers only.is ready to buy or sell at any time.brings buyers and sellers together. brings buyers and sellers together.
The owner of a trading license who trades on the floor of the NYSE for his or her personal account is called a(n):DMM.independent broker.floor trader.stand-alone agent.dealer. floor trader

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