1. If a stocks required rate of return is 10% and the expected rate of return is...
Fantastic news! We've Found the answer you've been seeking!
Question:
1. If a stock’s required rate of return is 10% and the expected rate of return is 9%, the stock is believed to be ______
Undervalued.
Overvalued.
Fairly-valued
2. A 10-year $1,000 face value corporate bond has an annual coupon payment of 5% of the face value. The bond is currently selling at par ($900). Which of the following statement is NOT correct?
- The bond’s yield to maturity is 0%.
- The bond’s current yield is 5%.
- The bond’s capital gain yield is positive.
- The bond’s capital gain yield is negative.
3. Which of the following statements is correct?
- Preferred dividends paid are tax deductible.
- Interest expense is tax deductible.
- Common dividends paid are tax deductible.
- Special dividend payments are tax deductible.
4. Which of the following statements is not true?
Common stock represents ownership, and ownership implies control. - Stockholders elect directors, and directors hire management.
- Since managers are “agents” of shareholders, their goal should be maximizing stock price.
- There will be no agency problem if the founder is still the Chairman and CEO of the company.
Related Book For
Posted Date: