Which of the following statements regarding common shares is true?

Select one:

a. The par value of a common share is usually $100.

b. A partly paid share means bond-holders can partly claim for funds in case of default.

c. Dividends paid on common stock are at the discretion of the company.

d. In the event of financial difficulties, creditors of a company have limited recourse on the share holders.

e. The market value of common share is equal to its book value.

Operating Earnings are defined as;

Select one:

a. gross income less usual tax

b. net income derived from industrial operations only

c. the long term average of income from operations

d. net income adjusted for nonrecurring or unusual items

e. an index of how closely the firm follows GAAP accounting standards

Which of the following theory/hypothesis (theories/hypotheses) explains (explain) the relation between yield to maturity and time to maturity?

I. Expectation Theory

II. Market Segmentation Theory

III. Fisher Hypothesis

IV. Liquidity Preference Theory

Select one:

a. I, II and IV only

b. I and IV only

c. I and II only

d. I, II, III and IV

e. I, III and IV only

Which of the following variable(s) generally has the smallest impact on a stock's P/E ratio?

I. required return

II. expected growth rate of dividends

III. payout ratio

IV inflation

Select one:

a. I

b. III and IV only

c. II

d. IV

e. III

Investors tend to regard the telecommunications, financials and healthcare as:

Select one:

a. industries containing growth stocks

b. industries with good growth opportunities

c. industries with limited growth opportunities

d. industries with stocks of high P/E ratios

e. industries with highest multiples for P/E ratios.