11. Which of the following is NOT a feature of a common stock? a. Each share receives its equal dividend when dividends have been declared for that class of stock. b. Each share gets one vote at annual meetings on the election of directors to the run the company In the case of bankruptcy, the shareholders are always repaid before other creditors, Shareholders have a preemptive right to purchase new stock offerings unless they vote to waive that right c. d. 12. The next dividend payment by Giannis, Inc. will be $2.45 per share. The dividends are anticipated to maintain a 5.5 percent growth rate (g=.055), forever. If the stock currently sells for $48.50 per share, what is the required return? .1138 b. .0505 c. .0555 d. .1055 a. 13. The D/P, is referred to as the: a. total return. b. capital gains yield. c. discount rate. d. dividend yield. 14. a. Who typically votes on who are to be directors of the corporation? the shareholders b. preferred shareholders c. the senior bondholders d. the employees 15. The Aunt Fran Needlepoint is planning on paying a dividend of $1.25 a share next year, that is, D1. The firm expects to increase this dividend by 10 percent per year the following two years and then have the dividend grow at 3 percent annually thereafter. Which one of the following is the correct computation of the dividend for year 4? $1.25 x [2 * (1.1 * 1.03)] b. $1.25 X 1.12 x (1 - .03)' $1.25 X 1.12 x 1.031 d. $1.25 X 1.12 X 1.032 a. c. 16. a. The zero dividend growth model is a special case of the dividend growth model. The solution for the zero dividend growth model is all of the following EXCEPT: the same one used for finding the price of a preferred stock. b. the formula for a perpetuity. take the dividend paid out and multiply it by 10. d. identical for one used to find the value of a British consol. c. Chapter 8: Net present value and other investment criteria (8 questions) 17. a. The net present value (NPV): Increases as the required rate of return increases. b. is another name for the internal rate of return. is a method of analysis that cannot be applied to mutually exclusive projects. d. Decreases as the required rate of return increases. c. 3