Dividend yield is calculated by dividing

B) the annual dividend per share by the market price of one share of stock.

A) the market price of one share of stock by the annual dividend per share.

C) earnings per share by market price per share.

D) annual dividend per share by earnings per share.

Which one of the following is a characteristic of blue chip stocks?

C) long and stable dividend and earnings records

A) guaranteed minimum annual dividend of $2 a share

B) annual dividends of more than $5 per share

D) relatively high risk exposure

The consumer electronics industry would be most significantly affected by

B) interest rates and inflation.

The value of a stock is a function of

B) historic dividend growth rate.

C) most recent earnings per share.

Which of the following contributes to high P/E ratios?

B) high rate of earnings growth

Which of the following contributes to high P/E ratios?

B) high rate of earnings growth

High P/E ratios can be expected when investors expect

A) a high rate of growth in earnings.

B) low earnings. relative to market prices.

P/E ratios could rise even as earnings fall if

A) earnings fall at a faster rate than stock prices.

B) earnings fall at a slower rate than stock prices.

C) investors expect lower stock prices to be permanent.

D) investors expect lower earnings to be permanent.

Over the last year, a firm's earnings per share increased from $1.20 to $1.40, its dividends per share increased from $0.50 to $0.60, and its share price increased from $21 to $24. The firm maintained a relative P/E of 1.10 over the entire time period. Given this information, it follows that the

D) overall market P/E is declining.

A) stock experienced an increase in its P/E ratio.

B) company had a decrease in its dividend payout ratio.

C) current P/E of the overall market is 26.4.

Which of the following will lead to an increase in earnings per share?

C) an increase in return on equity if book value per share stays the same.

A) an increase in the P/E ratio.

B) an increase in the dividend payout ratio.

D) a decrease in the number of shares if return on equity stays the same.

An investor should purchase a stock when

B) the expected rate of return equals or exceeds the required return.

A) the market price exceeds the intrinsic value.

C) the capital gains rate is less than the required return and no dividends are paid.

D) the market price is greater than the justified price.

James is willing to settle for a 10% rate of return on EG stock at a time when investors, on average, are requiring an 11% rate of return on the same stock. Which of the following will happen?

D) James will be happy to buy the stock for less than he was willing to pay.

A) James will be have to pay more for the stock than he was willing to pay.

B) Investors with different required rates of return will pay different prices for the stock.

C) James will not be able to buy the stock unless the price changes.

John requires a 12% rate of return on EG stock at a time when investors, on average, are requiring an 11% rate of return on the same stock. Which of the following will happen?

C) John will not be able to buy the stock unless the price changes.

A) John will have to pay more for the stock than he was willing to pay.

B) Investors with different required rates of return will pay different prices for the stock.

D) John will buy the stock at a lower price.

Quiz 3 Investing SNHU17

Authored by Nhung Dao

Business

University

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Every shareholder is a part owner of the firm and, as such, has a direct claim on a portion of the firm's assets.

true

FALSE

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Companies typically issue new shares through an initial public offering (IPO).

true

FALSE

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

There is a stronger tendency for the stock market to increase in value rather than decrease in value over time.

true

FALSE

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which one of the following statements about common stock is true?

A) Common stock can provide attractive capital appreciation opportunities.

B) Dividends generally provide the greatest rate of return on common stocks.

C) Common stocks generally have a negative rate of return over a ten-year period.

D) The DJIA is the best indicator of the overall performance of common stocks.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

While many stocks increase in value over the long run, most of the return on stocks comes from dividends.

true

FALSE

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Firms tend to repurchase shares of their outstanding stock when they view the shares as undervalued.

true

FALSE

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

If a firm has a 2 million shares outstanding and its stock trades at $25 per share, the company also has $10,000,000 in debt. The company's market capitalization is

A) $40,000,000.

B) $49,000,000.

C) $50,000,000.

D) $60,000,000.

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Quiz 3 Investing SNHU17

Every shareholder is a part owner of the firm and, as such, has a direct claim on a portion of the firm's assets.

Companies typically issue new shares through an initial public offering (IPO).

There is a stronger tendency for the stock market to increase in value rather than decrease in value over time.

Which one of the following statements about common stock is true?

While many stocks increase in value over the long run, most of the return on stocks comes from dividends.

Firms tend to repurchase shares of their outstanding stock when they view the shares as undervalued.

If a firm has a 2 million shares outstanding and its stock trades at $25 per share, the company also has $10,000,000 in debt. The company's market capitalization is

The Charbridge Inc. has 4 million shares of stock outstanding. The stock has a par value of $1.00 per share and is currently trading at $36 per share. Nicole estimates the investment value of this stock at $38.50. According to this information, the market capitalization of Charbridge is

Dividend yield is calculated by dividing

Pilgrim Corp. stock currently sells for $25 per share? The annual dividend payment is $1.00 per share and earnings per share are $3.00. The dividend yield is and the dividend payout ratio is .

Access all questions and much more by creating a free account

Similar Resources on Wayground

Popular Resources on Wayground

Discover more resources for Business

Quiz 3 Investing SNHU17

Every shareholder is a part owner of the firm and, as such, has a direct claim on a portion of the firm's assets.

Companies typically issue new shares through an initial public offering (IPO).

There is a stronger tendency for the stock market to increase in value rather than decrease in value over time.

Which one of the following statements about common stock is true?

While many stocks increase in value over the long run, most of the return on stocks comes from dividends.

Firms tend to repurchase shares of their outstanding stock when they view the shares as undervalued.

If a firm has a 2 million shares outstanding and its stock trades at $25 per share, the company also has $10,000,000 in debt. The company's market capitalization is

The Charbridge Inc. has 4 million shares of stock outstanding. The stock has a par value of $1.00 per share and is currently trading at $36 per share. Nicole estimates the investment value of this stock at $38.50. According to this information, the market capitalization of Charbridge is

Dividend yield is calculated by dividing

Pilgrim Corp. stock currently sells for $25 per share? The annual dividend payment is $1.00 per share and earnings per share are $3.00. The dividend yield is ________ and the dividend payout ratio is ________.

Access all questions and much more by creating a free account

Similar Resources on Wayground

Popular Resources on Wayground

Discover more resources for Business

Pilgrim Corp. stock currently sells for $25 per share? The annual dividend payment is $1.00 per share and earnings per share are $3.00. The dividend yield is and the dividend payout ratio is .