Question 2

0 / 2 points

In our formula for valuing a stock with no growth in dividends (P₀ = D₁ / K), D₁ is the

Question options:

a)	Price of the stock today

b)	Dividend paid today

c)	Dividend at the end of the first year

d)	Required rate of return

Question 4

0 / 2 points

If a bonds coupon rate exceeds its required rate of return, the sale price (value) would be

Question options:

a)	Less than face value

b)	More than face value

c)	We cannot determine from just this information

d)	The two are not related in terms of determining price

Question 8

0 / 2 points

Majority voting

Question options:

a)	Makes it possible for a minority owner to elect some board of director members

b)	Allows any group with more than 50% ownership to elect all of the directors

c)	Helps prevent hostile takeovers

d)	Allows those with minority ownership interests to challenge management

Question 13

0 / 2 points

Risk-free rate of return is

Question options:

a)	The rate of return the investor demands for giving up the current use of funds on a noninflation-adjusted basis

b)	A premium an investor requires to compensate for the eroding effect of inflation

c)	The premium associated with special risks of a given investment

d)	The sum of the real rate of return and the inflation premium