increase will increase the stock price because many investors value stock with a dividend-discount model. might MM disagree with this assertion?

Q: If the fair value of a stock is more than its market value, which of the following is a reasonable…

A: Fair value of a stock is also known as its intrinsic value.Intrinsic value of a stock is the present…

Q: value company would most likely include stocks with high eps growth and high valuations

A: Value investing involves investment in those stocks which may not have good valuations currently but…

Q: If you want to buy a particular stock but are worried thatdemand from investors could push the price…

A: you want to buy a particular stock but are worried thatdemand from investors could push the price to…

Q: Can an investor eliminate market risk from a common stock portfolio?

A: There are two types of Risk 1. Systematic  Risk:- These are risk pertains to Industry as a whole not…

Q: How does a fundamental analyst interpret the support level as the price range? Group of answer…

A: There are two types of analysis a) Fundamental analysis b) Technical analysis

Q: How would you use the dividend yield model to value the price of a stock if it presently does not…

A: Answer: Dividend discount model is used to valuate a stock that is expected to pay future dividends.…

Q: how does diversification prevent individual stock prices from going down

A: Diversification is a method that mixes a wide variety of investments within a portfolio. By doing…

Q: *which of the following statements is true? Select one: O Investors sell a stock when required…

A: When the stock is overvalued, which means the market price of stock is more than the intrinsic value…

Q: Based on the Dividend Discount Model, if a company’s projected rate of growth in earnings and…

A: formula for dividend discount model: P =    D1/ r - g D1 represents Dividend g represents growth…

Q: If there is a stock which is substantially overvalued, where it should plot relatively to the SML?…

A: SML or Security Market Line:- It is an graphical representation of CAPM model. SML graph is being…

Q: Should an increase in the volatility of a firm's stock returns be associated with an increase in the…

A: A Call Option is the option(right but not obligation) to purchase an underlying security at…

Q: What is meant by efficient market hypothesis? The third form of EMH, which suggest that all type of…

A: Efficient Market Hypothesis (EMH) states that market has all the information been factored in the…

Q: Dylan is a stock market day-trader who aims to profit from liquidity provision. Dylan's trading…

A: In the dynamic realm of the stock market, where every tick of the clock influences financial…

Q: d) Would you buy or sell this share? Why?  e) Explain the difference between common and preference…

A: Risk premium - It is a measure of excess return that an investor requires for risk taken in an…

Q: A company announces a major expansion which causes the price of its stock to increase and also…

A: Put option- A contract that gives the option buyer the right but not the obligation to sell a…

Q: The constant-growth dividend model will provide invalid solutions when: the growth rate of the stock…

A: the question is based on the valuation of stock by dividend discounting model in case constant…

Q: At time t you own one stock that pays no dividends, and observe that F(t, T) < St/Z(t, T). What…

A: Arbitrage is the act of an arbitrageur where the person buys or sells at the same time in similar…

Q: Why might the stock price changing make sense within the context of risk and return?

A: Stock price movement is dependent on various factors which would eventually impact the required rate…

Q: In the short run (i.e., a static viewpoint), stock price reflects the weighted average opinions of…

A: The first three statements reflect an Efficient market hypothesis.  This states that no single…

Q: According to the weak-form efficient market hypothesis, which of the following types of information…

A: WEAK FORM EFFICIENT MARKET HYPOTHESIS: ALL PAST DATA ARE REFLECTED IN THE PRICES OF THE STOCK.

Q: short seller anticipates the stock price will __________, so that the share can be purchased later…

A: In case of short selling, shares are short sold with the anticipation of share price falling and…

Q: BUFFET'S REASON FOR PREFERRING SHARE REPURCHASES VALID? IS A "HOMEMADE DIVIDEND" A VIABLE…

A: Dividends represent a crucial aspect of corporate finance, functioning as periodic distributions of…

Q: Generally speaking, a growth stock has duration than a value stock. Multiple Choice More, longer…

A: Growth stocks include stocks of high yielding growth companies which have had a good performance in…

Q: Indicate factors influencing the market price of a stock. Explain how changes in the factors will…

A: There can be many factors affecting the stock price, for example, the growth rate, the required…

Q: If the market value and the intrinsic value of a stock differ; O a. the stock sells for its fair…

A: Intrinsic value is the actual value of the stock which is best on the fundamental factor that can be…

Q: WHY AAPL stock is the best momentum to buy now?

A: AAPL stock has been growing in recent times and expect that trend to continue in the future.

Q: If a stock has a higher volatility, would your broker would want to set the maintenance margin…

A: Maintenance margin is minimum margin amount that we need to maintain as an investor after the…

Q: Can an investor eliminate market risk from a portfolio of common stocks?

A: Beta is a systemic risk of this kind. The risk integral to the business or segment as a whole is…

Q: If the expected rate of return on a stock is less than its required rate of return, investors will…

A: The expected return on the stock is compared with the required return on that stock to identify over…

Q: a) Discuss why international stock might have high volatility but low betas.

A: Beta is the sensitivity of the price of an asset to movements in the market as a whole and is a…

Q: alue of a stock is less than the current market price, I should ________________ the stock since it…

A: In the stock market prices of stocks are changing and are not fixed and sometimes go up and…

Q: What are the disadvatages of selling call options LEAP ,which allows the seller to sell shares at a…

A: Options are derivative contracts. Financial options gives the right, but not obligation, to buy or…

Q: If stock prices follow a random walk, their prices bear no relation to the company's real…

A: Random walk theory states that change in the price of the company stock  is  random and cannot be…

Q: How will you know if you think a certain stock will be more or less volatile in terms of price…

A: Investors have different options to make investments, and the motive behind investments is to…

Q: To what extent does investor mood contribute to the observed fluctuati

A: Introduction : In simple words, the given question relates to the concept of emotion investing,…

Q: Explain why it is or isn’t optimal to exercise early (a) an American call and (b) an American put…

A: Options are the rights for the holder to sell or buy the stock at the future date with future…

Q: Which of the following statements is CORRECT? Multiple Choice Company-specific risk can be…

A: The unsystematic risk is the company specific risk, the systematic risk is the vulnerability related…

Q: Consider a perpetual preferred share paying a fixed dividend. What will happen to the market value…

A: When it comes to receiving dividends from the corporation, preferred shareholders would take…

Q: 3) Understanding if a stock is undervalued or overvalued will influence if the investor will invest…

A: Overvaluation of a stock occurs when its market price surpasses its intrinsic value, meaning it is…

Q: Which of the following techniques is used to value stock options?   a. Black-Scholes method b.…

A: black scholes method is used to value options

Q: In efficient markets, the rate of return on a stock should be: A. always greater than the risk-free…

A: Efficient market is the market in which stock prices refelcts all the information available.

Q: Particulars 1. Discount rate АВС XYZ 18.5% 14.25% Not 2. Historical growth rate 2.2218% available 3.…

A: Stock is the security which is offered by the firm to collect the funds. Stock value fluctuates in…

Q: Explain carefully why Blacks approach to evaluating an American call option on a dividend-paying…

A: The Black's approach in finance is considered to be a very popular method for computing american…

Q: What does the term "intrinsic value" mean? Discuss. 2. Once an investor calculates intrinsic value…

A: 1. The intrinsic value of a stock is its true value. It refers to what a stock (or any asset, for…

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.