Rose is concerned about a stock in her portfolio because in recent periods, the dividend she has received for each share has gotten smaller while the share price has remained relatively constant. What financial metric is Rose analyzing?

• Dividend cover

• Dividend per share

• Payout ratio

• Dividend yield

Which of the following describes equity securities, rather than debt securities or derivatives?

• They carry more risk than debt securities, but less than derivatives.

• They offer a fixed rate of return.

• They are best for hedging against changes in currency exchange rates.

• They typically generate the highest returns of the three types of marketable securities.

What is one disadvantage of NPV as a capital budget method?

• Although the weighted average cost of capital is commonly used as the discount rate, it is not a perfect input.

• It can be very difficult to calculate, even if inputs like cash flows are quite clear.

• It can only be used to evaluate bonds.

• It cannot be used to compare mutually exclusive investments.

Select a reason why a company would want to go public.

• To consolidate control of the company in the hands of management

• To decrease administrative costs

• To have access to cheaper capital than a private company would

• To increase direct oversight from investors