Question

1. LB Moore has 43,000 shares of common stock outstanding. The firm just paid an annual dividend of $3.00 per share on this stock. The market rate of return is 21.00 percent. What will one share of this stock be worth one year from now if the dividends grow by 6.60 percent annually? $22.21 $23.67 $21.31 $19.82

2.

A stock is selling for $13.70 a share given a market return of 23 percent and a capital gains yield of 8.6 percent. What was the amount of the last annual dividend that was paid?

$1.90

$2.99

$1.92

$1.82

3. Which one of the following statements related to preferred stock is correct?

Preferred stock generally has a stated value of $1,000 per share.

Preferred stock dividends become a liability of the issuing firm at the beginning of each tax year in an amount equal to the total dividends payable within that tax year.

From a legal point of view, preferred stock is classified as corporate equity.

Preferred stock automatically grants voting rights to its owner.

4.

Angelo Importers has not paid the last two quarterly preferred dividends of $1.50 per share. How much must the firm pay per share of preferred stock this quarter if the firm also wants to pay a common stock dividend? Assume the preferred stock is cumulative preferred.

$1.50

$4.50

$3.00

$0.00

5.

The profit a dealer makes from buying and selling a security is called the:

margin.

stated value.

spread.

proxy.

Answer 1

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Home nert Page Layout Formulas Data Review View dd-Ins Cut copy ▼ Format Painter Σ AutoSum ー E " ゴWrap Text B า 프 . Ej-., Δ. : r_一 逻锂函Merge & Center. $, % , 弼,8 conditional Format . Cell Insert Delete Format Paste Sort &Find & Formatting as Table Styles2 Clear Clipboard Font Alignment Number Styles Cells Edting AN89 AM AN AP AQ AR AS AT AU AV AW AX AY 72 73 74 75 76 ke-23% P0 = 13.70 CAPITAL GAIN YIELD = g-8.6% ke D1/P0 +g 0.23 D1/13.70 +0.086 0.144 D1/13.70 D1 = 1.9728 D1 - DO(1+g) 1.9728 DO (1+0.086) 78 79 80 81 82 83 84 85 86 87 ANS2 DO-182 1.9728/1.086 ANS 3Preferred stock dividends become a liability of the issuing firm at the beginning of each tax year in an amount equal to the total dividends payable within that tax year ANS 4 $ 4.50 TOTAL DIVIDEND TO PREFERRED HOLDERS WILL BE 4.5 (1.5 1.5 1.5 FOR CURRENT QUARTER) 89 90 ANS 5 SPREAD DIFFERENCE BETWEEN BID & ASK 4HKE CAPM UTILITY, SH beta bond c uture INDEX INTL CAP BUD LEASING PV, FV, ANNUITYDIR cleanYIELD bond stru WACC RES1 ex di erences: A1310 福 130% 03:56 11-01-2019