Reference no: EM132853058

Questions -

Q1) If an individual stock's beta is higher than 1.0, that stock is:

a. Less risky than the market

b. Exactly as risky as the market

c. Riskier than the market

d. None of the given choices

Q2) Entoma owns cumulative preference share of Zeta company. Zeta company, didn't paid the last 3 years of it's dividend and declared dividend for the current year. Which of the following is most likely true?

a. Entoma will receive equivalent of 3 years, which is the last unpaid 3 years, from the Zeta company

b. Entoma will not receive any dividend from Zeta company

c. Entoma will receive equivalent of the 4 years of dividend from Zeta company

d. Entoma will receive the dividend for the current year from Zeta company

Q3) Freecs company have FCF for 2019 amounting to Php120,000 and for 2020 amounting to Php200,000, growth rate of 4%, weighted average cost of capital of 10%, liabilities with total market value of Php1,000,000, Preferred stocks of Php 100 @ 10,000 par, 75% of the total common shares, which is 100,000 shares, is outstanding. What is the value of the stock of Freecs company?

a. Php50.22 per share

b. Php41.62 per share

c. Php14.95 per share

d. Php26.67 per share

Q4) Machi has a net income of Php5,000,000 and cumulative preferred dividends of Php2,000,000 annually that doesn't been paid for 2 years, including the current year, and outstanding common stock of Php100,000. If the industry has P/E multiplier of 2.5, what is the value of the firm's shares of stock?

a. Php100 per share

b. Php125 per share

c. Php25 per share

d. Php225 per share

Q5) It is the arbitrary value established for legal purposes in the firm's articles of incorporation.

a. Intrinsic Value

b. Fair Value

c. Par Value

d. Market Value

6) Which of the following statement is least likely to be true?

a. Common stocks have higher rights than preferred stocks for company assets

b. Equity securities consist of preferred stock and common stock

c. In Equity securities, the party who bought stocks are called stockholders

d. Creditors have higher rights than stockholders for company assets

Q7) A firm is expected to generate P1.5 million in operating income and pay P250,000 in interest. Ignoring taxes, this will generate 12.50 earnings per share. What will happen to EPS if operating income increases to P2.0 million?

a. EPS increases to P17.50

b. EPS increases to P15.63

c. EPS increases to P20.00

d. EPS increases to P16.67

Q8) Which of the following statements is least likely true regarding dividends?

a. Preferred stocks are guaranteed with dividend

b. Common stocks are entitled with dividends

c. Common stocks are guaranteed with dividend

d. Preferred stocks prioritized before the common stocks with regards to dividends

Q9) The excess of selling price and par value is recorded under which account?

a. Additional paid in capital

b. Treasury stock

c. Common share of stock

d. Preferred share of stock

Q10) Market value of Krueger company's total asset is Php3,000,000, total liabilities of Php1,000,000, liquidation expenses of Php100,000 and outstanding common stock of 100,000 shares. What is the liquidation value per share of Krueger company?

a. Php1 per share

b. Php20 per share

c. Php19 per share

d. Php30 per share