Question
Need help with this two question. Thanks! 1.You notice that a firm with a relatively high stock price is profitable and growing quickly. What does
Need help with this two question. Thanks!
1.You notice that a firm with a relatively high stock price is profitable and growing quickly. What does a zero-dividend yield most likely indicate about the firm?
A. The firm is bankrupt. It's time for the firm to liquidate assets.
B. The firm currently isn't paying dividends and will never pay dividends. This indicates a principal-agent problem.
C. The firm currently isn't paying any dividends. The firm is likely plowing back earnings, and will likely continue to do so, until growth slows.
D. The firm is doing well but the stock price is too high
2.Would you expect to pay a higher interest rate for an unsecured loan for $2,000 or a secured loan for the same amount?
A. The secured loan would be at a higher rate.
B. The rate for both would be about the same on average.
C. The rate for each loan would vary based on inflation.
D. The unsecured loan would be at a higher rate
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