Question 1

A) According to the constant dividend payout ratio policy,

Group of answer choices

earnings remaining after preferred stock dividends have been paid should be paid to common stockholders.

dividends should be paid only after all investment financing needs have been met.

dividend payments are a fixed percentage of earnings per share.

dividends are set at a constant percentage of the value of the common stock.

a dividend is the residual above the payout ratio.

B) Which of the following has a beta of 1?

Group of answer choices

a risk-free security.

the market.

every security should have a beta greater than 1.

long-term Treasury bonds.

every security should have a beta of 1.

C)

The primary result of a stock split or stock dividend is:

Group of answer choices

an increase in the number of common shares outstanding

an increase in the common equity account

an increase in the P/E ratio

an increase in the market value of common shares

a decrease in the number of common shares outstanding

D)

If the investor's required rate of return is less than the bond's coupon rate:

Group of answer choices

the bond will be valued at a premium above par value.

the bond will be valued at par value.

the bond will be considered a junk bond.

the bond will experience greater volatility.

the bond will be valued at a discount below par value.

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