A) 6.01%
B) 6.17%
C) 6.33%
D) 6.49%
E) 6.65%
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A) $12.00
B) $12.64
C) $13.30
D) $14.00
E) $14.70
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A) $2,650.00
B) $2,789.47
C) $2,928.95
D) $3,075.39
E) $3,229.16
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A) A major disadvantage of financing with preferred stock is that preferred stockholders typically have supernormal voting rights.
B) Preferred stock is normally expected to provide steadier, more reliable income to investors than the same firm's common stock, and, as a result, the expected after-tax yield on the preferred is lower than the after-tax expected return on the common stock.
C) The preemptive right is a provision in all corporate charters that gives preferred stockholders the right to purchase (on a pro rata basis) new issues of preferred stock.
D) One of the disadvantages to a corporation of owning preferred stock is that 70% of the dividends received represent taxable income to the corporate recipient, whereas interest income earned on bonds would be tax free.
E) One of the advantages to financing with preferred stock is that 70% of the dividends paid out are tax deductible to the issuer.
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B
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A) $40.35
B) $41.82
C) $43.33
D) $44.85
E) $46.42
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A) 7.54%
B) 7.73%
C) 7.93%
D) 8.13%
E) 8.34%
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A) $104.27
B) $106.95
C) $109.69
D) $112.50
E) $115.38
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E
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A) $0.95
B) $1.05
C) $1.16
D) $1.27
E) $1.40
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A) The expected return on the stock is 5% a year.
B) The stock's dividend yield is 5%.
C) The price of the stock is expected to decline in the future.
D) The stock's required return must be equal to or less than 5%.
E) The stock's price one year from now is expected to be 5% above the current price.
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E
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A) $2.20
B) $2.44
C) $2.69
D) $2.96
E) $3.25
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A) 6.50%
B) 6.83%
C) 7.17%
D) 7.52%
E) 7.90%
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A) Stock A's expected dividend at t = 1 is only half that of Stock B.
B) Stock A has a higher dividend yield than Stock B.
C) Currently the two stocks have the same price, but over time Stock B's price will pass that of A.
D) Since Stock A's growth rate is twice that of Stock B, Stock A's future dividends will always be twice as high as Stock B's.
E) The two stocks should not sell at the same price. If their prices are equal, then a disequilibrium must exist.
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A) $17.39
B) $17.84
C) $18.29
D) $18.75
E) $19.22
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A) $1,456
B) $1,529
C) $1,606
D) $1,686
E) $1,770
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A) 8.37%
B) 8.59%
C) 8.81%
D) 9.03%
E) 9.27%
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A) $314.51
B) $331.06
C) $348.48
D) $366.82
E) $386.13
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A) Stock A must have a higher stock price than Stock B.
B) Stock A must have a higher dividend yield than Stock B.
C) Stock B's dividend yield equals its expected dividend growth rate.
D) Stock B must have the higher required return.
E) Stock B could have the higher expected return.
Correct Answer
verified
Correct Answer
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