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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
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
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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
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
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