Homework Answers
| Answer : Option d [ Current yield ] |
| Explanation : Dividend yield = Dividend / Current market price of stock |
| Current yield = Coupon / Current market price of bond |
| If you have any doubt then please ask |
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a. The dividend yield on a common stock is most similar to which yield on a...
1. The current dividend yield on Clayton's Metals common stock is 3.2 percent. The company just...
1. The current dividend yield on Clayton's Metals common stock is 3.2 percent. The company just paid a $1.48 annual dividend and announced plans to pay $1.54 next year. The dividend growth rate is expected to remain constant at the current level. What is the required rate of return on this stock? 7.25 percent 7.82 percent 8.08 percent 8.75 percent 8.39 percent 2. Which one of the following is computed by dividing next year's annual dividend by the current stock...
Dividend yield is most often computed for common stock a. because the preferred stock market price...
Dividend yield is most often computed for common stock a. because the preferred stock market price per share is always lower than common stock, causing an inflated dividend yield. b. because common stock dividends are always lower than preferred stock dividends and present the most conservative estimates of dividend yield. c. because the cash dividends paid on common stock normally vary with the profitability of the corporation. d. because the preferred stock dividends vary with the profitability of the corporation....
The common stock of Pierson Enterprises has historically had a high dividend yield and is expected...
The common stock of Pierson Enterprises has historically had a high dividend yield and is expected to continue to do so. As a result, the majority of its shareholders are individuals and entities that are seeking a regular source of cash income. Most of these shareholders pay either no taxes or a relatively low amount of taxes. The fact that most of these shareholders have similar characteristics is referred to by which one of the following terms? 01.distribution effect 02.efficient...
4. If a stock is expected to pay a $2 dividend, and has an expected growth...
4. If a stock is expected to pay a $2 dividend, and has an expected growth rate of 9%, what is the expected rate of return if the stock sells for $50. 5. What price would you pay for a stock that just paid a $1 dividend has a 6% growth rate, if your required rate of return is 15%? 6. What is the expected rate of return on a stock if the risk free rate is 2%, the market...
What is the yield to maturity of a five-year, $5000 bond with a 4.5% coupon rate...
What is the yield to maturity of a five-year, $5000 bond with a 4.5% coupon rate and semi-annual coupons if this bond is currently trading for a price of S4876? a 4.5% A. 5.07% Ο B. 4.30% ОС. 8.60% OD. 4.50% E. 6.30% aprice of
7.4 Unlike the coupon interest rate, which is fixed, a bond's yield varies from day to...
7.4
Unlike the coupon interest rate, which is fixed, a bond's yield varies from day to day depending on market conditions. To be most useful, it should give us an estimate of the rate of return an investor would earn if that investor purchased the bond today and held it for its remaining life. There are three different yield calculations: Current yield, yield to maturity, and yield to call. A bond's current yield is calculated as the annual interest payment...
Keller Metals common stock is selling for $37 a share and has a dividend yield of...
Keller Metals common stock is selling for $37 a share and has a dividend yield of 3.2 percent. What is the dividend amount? ОА $3.49 ОВ. $11.25 OC $11.52 OD. $1.15 OE $1.18
די the investor select? Why? 4 11. Calculating current yield and yield to maturity. Describe and differentiate between...
די the investor select? Why? 4 11. Calculating current yield and yield to maturity. Describe and differentiate between a bond's (a) current yield and (b) yield to maturity. Why are these yield measures important to the bond in- vestor? Find the yield to maturity of a 20-year, 9 percent, $1,000 par value bond trading at a price of $850. What's the current yield on this bond? Calculating key financial ratios. Selected financial information about Backpacking Resources Inc. is as follows:...
What is the dividend yield for Company? Shares of Common stock 540,000 Shares of Preferred stock...
What is the dividend yield for Company? Shares of Common stock 540,000 Shares of Preferred stock 112,000 Common Stock Dividends $2,197,800 Preferred Stock Dividends $1,680,000 Market Price share of common stock $11 0.28 0.37 1.36 1.78
The correct "cost" for each component of capital is: c) The current dividend rate for preferred...
The correct "cost" for each component of capital is: c) The current dividend rate for preferred and common stock and the after-tax cost of the current yield-to-maturity for debt a) The current dividend rate for common and preferred stock and the coupon interest rate for debt b) The market's required rate of return for preferred stock, common stock and debt, each of which is further reduced by the tax rate d) The market's required return for preferred and common stock...
Dividend yield is most often computed for common stock a. because the preferred stock market price per share is always lower than common stock, causing an inflated dividend yield. b. because common stock dividends are always lower than preferred stock dividends and present the most conservative estimates of dividend yield. c. because the cash dividends paid on common stock normally vary with the profitability of the corporation. d. because the preferred stock dividends vary with the profitability of the corporation....
The common stock of Pierson Enterprises has historically had a high dividend yield and is expected to continue to do so. As a result, the majority of its shareholders are individuals and entities that are seeking a regular source of cash income. Most of these shareholders pay either no taxes or a relatively low amount of taxes. The fact that most of these shareholders have similar characteristics is referred to by which one of the following terms? 01.distribution effect 02.efficient...
What is the yield to maturity of a five-year, $5000 bond with a 4.5% coupon rate and semi-annual coupons if this bond is currently trading for a price of S4876? a 4.5% A. 5.07% Ο B. 4.30% ОС. 8.60% OD. 4.50% E. 6.30% aprice of
7.4
Unlike the coupon interest rate, which is fixed, a bond's yield varies from day to day depending on market conditions. To be most useful, it should give us an estimate of the rate of return an investor would earn if that investor purchased the bond today and held it for its remaining life. There are three different yield calculations: Current yield, yield to maturity, and yield to call. A bond's current yield is calculated as the annual interest payment...
Keller Metals common stock is selling for $37 a share and has a dividend yield of 3.2 percent. What is the dividend amount? ОА $3.49 ОВ. $11.25 OC $11.52 OD. $1.15 OE $1.18
די the investor select? Why? 4 11. Calculating current yield and yield to maturity. Describe and differentiate between a bond's (a) current yield and (b) yield to maturity. Why are these yield measures important to the bond in- vestor? Find the yield to maturity of a 20-year, 9 percent, $1,000 par value bond trading at a price of $850. What's the current yield on this bond? Calculating key financial ratios. Selected financial information about Backpacking Resources Inc. is as follows:...
The correct "cost" for each component of capital is: c) The current dividend rate for preferred and common stock and the after-tax cost of the current yield-to-maturity for debt a) The current dividend rate for common and preferred stock and the coupon interest rate for debt b) The market's required rate of return for preferred stock, common stock and debt, each of which is further reduced by the tax rate d) The market's required return for preferred and common stock...
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