32. If Delta airlines expects dividends to be $1.20 every quarter and the required return is 8%, then what is fair price for the stock?
A) $15.00
B) S30.00
C) $60.00
D) none of the above
33. Which of the following is false?
A) Unless a firm is financially distressed we assume in our pricing models that the firm can live on indefinitely.
B) Shareholders face double taxation relative to bondholders.
C) Bondholders of a company are in a less risky position than shareholders if the firm goes to bankruptcy court.
D) The author of the CAPM won a Noble Prize in economics.
E) The CAPM tells you how much capital to invest in a bond
32. Delta airlines expects dividends to be $1.20 every quarter and the required return is 8%, Then fair price of stock is -
(A) $15 as, expected divindend will be divided by required return= (1.2/8%) =$15
33. Which of the following is false?
E) The CAPM tells you how much capital to invest in a bond. This statement is False.
AS, CAPM talks about the rate of return on stocks after considering their beta and equity risk premium.
32. If Delta airlines expects dividends to be $1.20 every quarter and the required return is...