a)Six months ago, you purchased 100 shares of stock in ABC Co. at a price of $44.89 a share. ABC stock pays a quarterly dividend of $.15 a share. Today, you sold all of your shares for $46.23 per share. What is the total amount of your capital gains on this investment?

Select one:

1. $1.24

2. $1.64

3. $40.00

4. $134.00

5. $154.00

b)When firms issue more debt, the tax shield on debt ____, the agency costs on debt (i.e., costs of financial distress) ____, and the agency costs on equity ____.

Select one:

1. increases; increase; increase

2. decreases; decrease; decrease

3. increases; increase; decrease

4. decreases; decrease; increase

5. increases; decrease; decrease

c)

The risk-free rate of return is 3.5% and the market risk premium is 7.5%. What is the expected rate of return on a stock with a beta of 1.5?

Select one:

1. 14.5%

2. 10.24%

3. 13.10%

4. 14.24%

5. 15.36%

d)

Investors who purchase shares of stock two days prior to the ex-dividend date will be eligible to receive that quarters dividend.

Select one:

True

False