FIN 302 Fall 24 - Quiz #2 (11/5)

One year ago, you purchased a stock at a price of $32.16. The stock pays quarterly dividends of $0.20 per share. Today, the stock is selling for $28.00 per share. What is your capital gain?

• -$4.16
• -$3.96
• -$3.76
• -$3.16
• -$2.96

Which one of the following represents the capital gains yield as used in the dividend growth model?

• D1
• D1/P0
• P0
• g
• g/P0

Which of the following methods can be used to find a benchmark (normal) PE ratio for a company? I. Historical average of the firm’s PE ratio II. Average PE ratio of comparable firms in the same industry III. Market average PE ratio during economic downturns IV. PE ratio of firms in different industries

• I and III
• II and IV
• I and II
• III and IV
• I, II, and III

A firm has an EPS of $2.08 and a benchmark PE of 12.7. What is the estimated current stock price?

• $27.42
• $27.09
• $26.08
• $26.42
• $28.13

Which voting method helps minority shareholders by allowing them to allocate all their votes to a preferred candidate?

• Straight voting
• Cumulative voting
• Majority voting
• Unanimous voting
• Board voting