Reference no: EM133111962

Questions -

Q1. TablesR US has a cumulative preferred share issue that is supposed to pay a quarterly dividend of $2. Due to financial constraint the company failed to pay four consecutive dividends to investors and then managed to pay an ordinary share dividend the very next quarter. How much cash must company pay to each preferred shareholder?

Q2. Which of the following is an example of systematic risk?

a. The government raises interest rates unexpectedly.

b. Woolworths announces record earnings.

c. BHP Billiton posts lower than expected earnings.

d. Coca-Cola announces higher than expected earnings.

Q3. Auto Ltd systematic risk is 0.6 and risk free rate is 5.6%. Market is expected to earn a return of 11%. What is Auto Ltd cost of equity?

a. 12.20%

b. 8.84%

c. 9.60%

d. 10.23%

Q4. You bought a Woolworths share on 1 January 2013 for $44.50 and sold it one year later for $48.50. During the year, Woolworths paid a dividend of $2.50 per share. What is the holding period return?

a. 10.61%

b. 6.61%

c. 22.01%

d. 14.61%