2) A Wall Street Journal quotation for a company has the following values: Div: $1.12, PE: 18.3, Close: $37.22. Calculate the approximate dividend payout ratio for the company. A) 18 percent B) 35 percent C) 45 percent D) 55 percent
2) A Wall Street Journal quotation for a company has the following values: Div: $1.12, PE: 18.3, Close: $37.22. Calculate the approximate dividend payout ratio for the company. A) 18 percent B) 35 percent C) 45 percent D) 55 percent
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
2
![1) The firm's purchase of real assets is also referred to as the:
A) capital structure decision.
B) CFO decision.
C) financing decision.
D) capital investment decision.
2) A Wall Street Journal quotation for a company has the following values: Div: $1.12, PE:
18.3, Close: $37.22. Calculate the approximate dividend payout ratio for the company.
A) 18 percent
B) 35 percent
C) 45 percent
D) 55 percent
3) The ultimate financial goal of a corporation is to:
A) minimize stockholder risk.
B) maximize profit.
C) maximize the value of the corporation to the stockholders.
D) increase size of the firm.
4) A four-year bond has an 8 percent coupon rate and a face value of $1,000. If the current
price of the bond is $878.31, calculate the yield to maturity of the bond (assuming annual
interest payments).
A) 8 percent
B) 10 percent
C) 12 percent
D) 6 percent
5) A project requires an investment of $900 today. It can generate sales of $1,100 per year
forever. Costs are $600 for the first year and will increase by 20 percent per year. (Assume all
sales and costs occur at year-end [i.e., costs are $600 @ t= 1].) The project can be terminated
at any time without cost. Ignore taxes and calculate the NPV of the project at a 12 percent
discount rate.
A) $65.00
B) $57.51
C) $100.00
D) It cannot be calculated as g>r.
6) World-Tour Co. has just now paid a dividend of $2.83 per share (Divo); its dividends ar
expected to grow at a constant rate of 6 percent per year forever. If the required rate of retur
on the stock is 16 percent, what is the current value of the stock, after paying the dividend?
A) $70
B) $56
C) $30](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc61a5d7-7e46-42e0-9d49-1ea61d0fa8b1%2F8895d65b-136a-4241-bb37-a37e9e14f96f%2Flmipq36_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1) The firm's purchase of real assets is also referred to as the:
A) capital structure decision.
B) CFO decision.
C) financing decision.
D) capital investment decision.
2) A Wall Street Journal quotation for a company has the following values: Div: $1.12, PE:
18.3, Close: $37.22. Calculate the approximate dividend payout ratio for the company.
A) 18 percent
B) 35 percent
C) 45 percent
D) 55 percent
3) The ultimate financial goal of a corporation is to:
A) minimize stockholder risk.
B) maximize profit.
C) maximize the value of the corporation to the stockholders.
D) increase size of the firm.
4) A four-year bond has an 8 percent coupon rate and a face value of $1,000. If the current
price of the bond is $878.31, calculate the yield to maturity of the bond (assuming annual
interest payments).
A) 8 percent
B) 10 percent
C) 12 percent
D) 6 percent
5) A project requires an investment of $900 today. It can generate sales of $1,100 per year
forever. Costs are $600 for the first year and will increase by 20 percent per year. (Assume all
sales and costs occur at year-end [i.e., costs are $600 @ t= 1].) The project can be terminated
at any time without cost. Ignore taxes and calculate the NPV of the project at a 12 percent
discount rate.
A) $65.00
B) $57.51
C) $100.00
D) It cannot be calculated as g>r.
6) World-Tour Co. has just now paid a dividend of $2.83 per share (Divo); its dividends ar
expected to grow at a constant rate of 6 percent per year forever. If the required rate of retur
on the stock is 16 percent, what is the current value of the stock, after paying the dividend?
A) $70
B) $56
C) $30
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education