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Prisgineers Backspace POP FB 26) All of the following affect the value of a share of common stock EXCEPT A) the dollar amount of the
Prisgineers Backspace POP FB 26) All of the following affect the value of a share of common stock EXCEPT A) the dollar amount of the dividends. B) investors' required rate of return. C) the future growth rate for dividends. D) the stock and paid-in-capital amounts on the balance sheet. 27) A small company struggling to reach profitabili pany struggling to reach profitability just announced a major new government contract that will validate its technology and generate revenue for the ne announcement of the contract will y cause the stock price to increase because res (the required return) is likely to increase. B) cause the stock price to decrease because the government usually pays below market price for the goods and services it purchases. cause the stock price to increase because res (the required return) is likely to decrease and g (the growth rate in future dividends) is likely to increase. D) have no effect on the stock price because the company has not yet paid any dividends. 28) You observe Thundering Herd Common Stock selling for $40.00 per share. The next dividend is expected to be $4.00, and is expected to grow at a 5% annual rate forever. If your required rate of return is 12%, should you purchase the stock? A) Yes, because the present value of the expected future cash flows is greater than $40. B) No, because the present value of the expected future cash flows is less than $40. C) Yes, because the present value of the expected future cash flows is less than $40. D) No, because the present value of the expected future cash flows is greater than $40. 29) Which of the following statements is MOST correct regarding beta? A) Beta must be calculated using at least 5 years of monthly returns data to be accurate. B) Beta can only be measured properly using daily returns. C) Beta for a particular company remains constant over time. D) Even professionals may not agree on the measurement of beta
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