Question
1. A stock will pay an annual dividend of $4 with a grow rate of 5% forever, and the first dividend will be paid at
1. A stock will pay an annual dividend of $4 with a grow rate of 5% forever, and the first dividend will be paid at the end of the second year. What is the price of the stock today if the required rate of return is 10%?
Select one:
a. $40
b. $84
c. $80
d. $72.73
2. Which of the following statements is not true?
Select one:
a. Direct finance is when bond issuers received the funds directly from investors.
b. All of THESE are true
c. Indirect finance is when bond issuers do not receive the funds directly from investors.
d. Companies get short-term financing in capital markets.
3.Treasure stock increases when a company repurchase its own outstanding shares
Select one:
True
False
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