Stocks Valuation And Stock Market Equilibrium(Financial Management And Financial Markets ) Questions and Answers

Question 1. An original investment is $30 and an expected capital gain is $10 then an expected final stock price will be
  1.    20
  2.    40
  3.    −$40
  4.    −$20
Explanation:-
Answer: Option B. -> 40
Answer: (b).40
Question 2. The constant growth rate is 7.2% and an expected rate of return is 12.5% then expected dividend yield will be
  1.    0.053
  2.    0.197
  3.    −5.3%
  4.    1.736
Explanation:-
Answer: Option A. -> 0.053
Answer: (a).0.053
Question 3. The second step in calculating value of stock with non-constant growth rate is to find out an
  1.    expected intrinsic stock
  2.    extrinsic stock
  3.    expected price of stock
  4.    intrinsic stock
Explanation:-
Answer: Option C. -> expected price of stock
Answer: (c).expected price of stock
Question 4. According to the investors point of view, an expected rate of return is rate on stocks which they
  1.    receive in future
  2.    received in past
  3.    yearly growth
  4.    semi-annual growth
Explanation:-
Answer: Option A. -> receive in future
Answer: (a).receive in future
Question 5. The constant growth rate is 6.5% and an expected dividend yield is 3.4% then an expected rate of return would be
  1.    0.099
  2.    22.1
  3.    0.031
  4.    1.912
Explanation:-
Answer: Option A. -> 0.099
Answer: (a).0.099
Question 6. The paid dividend is $20 and the dividend yield is 40% then the current price would be
  1.    0.6
  2.    60
  3.    50
  4.    0.02
Explanation:-
Answer: Option C. -> 50
Answer: (c).50
Question 7. The preferred stock dividends must be paid on common stock and must have
  1.    fixed amount of dividends
  2.    fixed amount of shares
  3.    variable amount of dividends
  4.    variable amount of shares
Explanation:-
Answer: Option A. -> fixed amount of dividends
Answer: (a).fixed amount of dividends
Question 8. The cash flow which is available for all the investors of the company is classified as
  1.    extrinsic stock
  2.    intrinsic stock
  3.    investing cash
  4.    free cash flow
Explanation:-
Answer: Option D. -> free cash flow
Answer: (d).free cash flow
Question 9. The present value of dividends which is expected to be provided in future is classified as an
  1.    intrinsic value of stock
  2.    extrinsic value of stock
  3.    intrinsic bonds
  4.    extrinsic bonds
Explanation:-
Answer: Option A. -> intrinsic value of stock
Answer: (a).intrinsic value of stock
Question 10. The constant growth model would not be used in the condition if growth rate is
  1.    greater than dividend paid
  2.    equal to realized rate of return
  3.    less than realized rate of return
  4.    greater than realized rate of return
Explanation:-
Answer: Option D. -> greater than realized rate of return
Answer: (d).greater than realized rate of return
© Lakshya_Education.com, All Right Reserved.
Contact Us services