Finding stock price and preferred and common stock value

Assignment Help Finance Basics

Reference no: EM1355104

1.The current price of DEF Corporation stock is $26.50 per share. Earnings next year should be $2 per share and it should pay a $1 dividend. The P/E multiple is 15 times on average. What price would you expect for DEF's stock in the future?

1. $15.00
2. $30.00
3. $26.50
4. $13.50

2.The opportunity for management to purchase a certain number of shares of their firm's common stock at a specified price over a certain period of time is a

1. pre-emptive right.
2. stock option.
3. stock right.
4. warrant.

3. All of the following are characteristics of preferred stock EXCEPT

1. it gives the holder voting rights which permit selection of the firm's directors.
2. it has less restrictive covenants than debt.
3. it is often considered quasi-debt due to fixed payment obligation.
4. its holders have priority over common stockholders in the liquidation of assets.

4.Nico Corporation's common stock currently sells for $160 per share. Nico just paid a dividend of $10.18 and dividends are expected to grow at a constant rate of 6 percent forever. If the required rate of return is 12 percent, what will Nico Corporation's stock sell for one year from now?

1. $155.45
2. $193.80
3. $187.04
4. $179.83

5.Julian is considering purchasing the stock of Pepsi Cola because he really loves the taste of Pepsi. What should Julian be willing to pay for Pepsi today if it is expected to pay a $2 dividend in one year and he expects dividends to growth at 5 percent indefinitely? Julian requires a 12 percent return to make this investment.

1. $31.43
2. $28.57
3. $43.14
4. $29.33

6.Jack wants to determine if Tangshan Inc. stock is fairly valued at $110.00 per share. The firm's dividends are expected to grow at 5 percent indefinitely. Assuming Tangshan China's most recent dividend was $5.50, and the required return on the stock was 14 percent, what is the value of Tangshan's stock?

1. $46.71
2. $110.00
3. $64.17
4. $18.75

7. A firm has an expected dividend next year of $1.20 per share, a zero growth rate of dividends, and a required return of 10 percent. The value of a share of the firm's common stock is ________.

1. 1. $100
2. 2. $12
3. 3. $10
4. 4. $120

8. All of the following are examples of standard debt provisions EXCEPT

1. maintaining all facilities in good working order.
2. maintaining satisfactory accounting records.
3. limiting the annual dividend payment.
4. paying taxes and liabilities when due.

Reference no: EM1355104

Questions Cloud

In what direction does the current flow through the resistor : Does the pivot point (i.e., the triangle in the diagram upon which the ruler balances) exert a force on the ruler? Does it exert a nonzero torque about the pivot.

Accusations of witchcraft : In the past there were many horrors that passed as treatment. And the lobotomies, trepanning (holes in the head) and accusations of witchcraft were all associated with mental illness at one time or another.

Explain environmental and organizational complexity : Why does environmental complexity lead to organizational complexity and name some of the elements that contribute to greater complexity for international organizations.

Illustrate what obligations do we have to society at large : illustrate what obligations do we have to society at large, including the world?" really make a difference in a company's competiveness.

Finding stock price and preferred and common stock value : The current price of DEF Company stock is $26.50 each share. Earnings next year should be $2 per share and it should pay a $1 dividend. The P/E multiple is fifteen times on average.

How long does capacitor take to reduce charge : A 50.0 g silver spoon at 20.0 C is placed in a cup of coffee at 90.0 C. How much heat does the spoon absorb from the coffee reach a temperature of 89 C.

How individual difference influence organizational activity : You need to include a mention of the managerial networking group meeting, and a short overview of what the speaker talked about.

Multicultrual perspective in all phases of counseling : Why is it important to use a multicultrual perspective in all phases of counseling, including assessment, diagnosis, and treatment?

Explain who actually owns the medical record : Explain Who actually owns the medical record and What is necessary for release of a complete copy of a medical record or simply information from the record?

User Account

All Pages