Tuesday, November 1, 2016

What is the model called that determines the present value of a stock based on its next annual dividend


1.
What is the model called that determines the present value of a stock based on its next annual dividend, the dividend growth rate, and the applicable discount rate? 
 
A. 
zero growth

B. 
dividend growth

C. 
capital pricing

D. 
earnings capitalization

E. 
discounted dividend
Refer to section 8.1


2.
Which one of the following is computed by dividing next year's annual dividend by the current stock price? 
 
A. 
yield to maturity

B. 
total yield

C. 
dividend yield

D. 
capital gains yield

E. 
growth rate
Refer to section 8.1


3.
Which one of following is the rate at which a stock's price is expected to appreciate? 
 
A. 
current yield

B. 
total return

C. 
dividend yield

D. 
capital gains yield

E. 
coupon rate
Refer to section 8.1


4.
Which one of the following types of stock is defined by the fact that it receives no preferential treatment in respect to either dividends or bankruptcy proceedings? 
 
A. 
dual class

B. 
cumulative

C. 
non-cumulative

D. 
preferred

E. 
common
Refer to section 8.2


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