Using the Gordon growth model, a stock's price increases if ________________.

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Quiz
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Business
•
University - Professional Development
•
Hard
Shaa Francke
Used 1+ times
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14 questions
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1.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
the dividend growth rate falls
the dividend growth rate increases
the required rate of return on equity rises
the expected sales price rises
2.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
SanData Inc. recently paid its annual dividend of $3. Dividends have consistently grown at a rate of 3%. You estimate that the stock has a required return of 17%. What is the intrinsic value of this stock?
$18.18
$21.43
$22.07
$25.07
3.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
Which of the following is true about preferred stock?
Preferred stockholders are paid after common stockholders receive dividends.
Preferred shares have a lower dividend yield than common stockholders or bondholders usually receive
Preferred shares have a greater claim on being repaid than shares of common stock if a company goes bankrupt.
All of the above
4.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
Investors are willing to purchase stocks having high P/E ratios because:
they expect these shares to sell for a lower price
they expect these shares to offer higher dividend payments
these shares are accompanied by guaranteed earnings
they expect these shares to have greater growth opportunities
5.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
If a firm unexpectedly raises its dividend permanently and by a substantial amount, the firm's stock price:
should rise, given dividend discount models
should decline, given discounted cash flow analysis
will remain constant, due to market efficiency
remain constant, due to random-walk behavior
6.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
The valuation of a common stock today primarily depends on
the number of shares outstanding and the number of its shareholders.
its expected future dividends and its discount rate.
Wall Street analysts.
the price to earnings ratio.
7.
MULTIPLE CHOICE QUESTION
3 mins • 1 pt
CK Company stockholders expect to receive a year-end dividend of $5 per share and then immediately sell their shares for $115 dollars per share. If the required rate of return for the stock is 20 percent, what is the current value of the stock?
$132
$122
$100
$110
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