Taggart Inc, 'a stock has a 401 chance of producing a 25% return, a 40% chance of producing a 10% return, and a 20% chance of producing a -20% return. What is the firm's expected rate of return? a. 9.40% b. 9.65% c. 9.90% d. 10.15% e. 10.40% Cheng Inc, is considering a capital budgeting project that has an excepted return of 20% and a standard deviation of 40%. What is the project's coefficient of variation? a. 1.20 b. 1.26 c. 1.33 d. 1.39 e. 1.46 Ton Noel holds the following portfolio: Tom plans to sell stock A and replace it with stock 2, which has a beta of 0.75. By how much will the portfolio beta change? a. -0.190 -0.211 -0.234 -0.260 -0.286 A proxy is a document giving one party the authority to act for another party, including the power to vote shares of common stock. Proxies can be important tools relating to control of firms. a. True b. False The total return on a share of stock refers to the dividend yield less any paid when the stock is purchased and sold. a. True b. False The preemptive right given current stockholders the right to purchase, on a pro rata basis stockholders any shares issued by the firm This right helps protect current against both dilution of control and dilution of value. a. True b. False Preferred stock is a hybrid--a sort of cross between a common stock and a bond--in the sense that it pays dividends t normally increase annually like a stock but its payments are contractually guaranteed like interest on a bond. a. True b. False