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7. Simple answer questions. 4 pts for each blank. Final answer only. No intermediate steps or explanations needed. You bought 100 shares of a stock
7. Simple answer questions. 4 pts for each blank. Final answer only. No intermediate steps or explanations needed. You bought 100 shares of a stock at $20 each. Each share of stock pays a $5 per quarter. The dividend yield at time of purchase was Suppose your 100 shares are worth $2,600 in total after 20 years. Your total return is a. b. If a stock's P/E ratio is 13.5x. The earnings per share is $3. The dividend payout ratio is 40%. Then the stock's price is Caminoull Wan sis The required return on a stock is comprised of and d. Reinvesting earnings into a firm will not increase the stock price unless e. For dividend growth model (P=Div/(i-g)), when growth rate g is increased and larger than market discount rate i, the stock price will go (up/down) f. Bid price is usually ( or =) asked price. g. For a fixed-rate bond, when per-period market discount rate is larger than per-period coupon rate, then we say the bond is priced at relative to par value. h. Assumption of going-concern value of a firm is that Therefore, if the liquidation value exceeds the market value of equity, then the firm has as going concern. i. If an analyst assumes that the weak-form efficient market hypothesis violates, then he can use analysis to make investment decisions
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