兹维博迪金融学第二版试题库9TB

Chapter Nine

Valuation of Common Stocks

This chapter contains 47 multiple choice questions, 17 short problems, and 9 longer problems. Multiple Choice

1.In a quote listing of stocks, the ________ is defined as the annualized dollar dividend divided

by the stock’s price, and is usually expressed as a percentage.

(a)cash dividend

(b)dividend payout

(c)dividend coverage

(d)dividend yield

Answer: (d)

2.According to the discounted-dividend model, the price of a share of stock is the ________

value of all expected ________ dividends per share, discounted at the market capitalization rate.

(a)present; current

(b)present; future

(c)future; future

(d)future; current

Answer: (b)

3.The value of common stock is determined by which of the following expected cash flows?

(a)dividends and interest payments

(b)dividends and maturity value of stock

(c)dividends and net cash flows from operations of the firm

(d)interest payments and maturity value

Answer: (c)

4.The ________ is the expected rate of return that investors require in order to be willing to

invest in the stock.

(a)market capitalization rate

(b)risk-adjusted discount rate

(c)cost of debt

(d)a and b

Answer: (d)

5.The ________ of dividends is the most basic assumption underlying the discounted dividend

model.

(a)industry average

(b)non-constant growth

(c)constant growth

(d)variability

Answer: (c)

6.BHM stock is expected to pay a dividend of $2.50 a year from now, and its dividends are

expected to grow by 6% per year thereafter. What is the price of a BHM share if the market capitalization rate is 7% per year?

(a)$250.00

(b)$192.31

(c)$25.00

(d)$19.23

Answer: (c)

7.IOU stock is expected to pay a dividend of $1.67 a year from now, and its dividends are not

expected to grow in the foreseeable future. If the market capitalization rate is 7%, what is the current price of a share of IOU stock?

(a)$11.69

(b)$23.86

(c)$116.90

(d)$238.60

Answer: (b)

8.GMATS stock is currently selling for $34.50 a share. The current dividend for this stock is

$1.60 and dividends are expected to grow at a constant rate of 10% per year thereafter. What must be the market capitalization rate for a share of GMATS stock?

(a)4.90%

(b)5.36%

(c)14.64%

(d)15.10%

Answer: (d)

9.Avacor stock is expected to pay a dividend of $1.89 a year from now, and its dividends are

expected to grow at a constant rate of 5% per year thereafter. If the market capitalization rate is 14% per year, what is the current price of a share of Avacor stock?

(a)$13.50

(b)$18.90

(c)$21.00

(d)$37.80

Answer: (c)

10.GRITO stock is currently selling for $46.10 a share. If the company is expected to pay a

dividend of $5.60 a year from now and dividends are not expected to grow thereafter, what is the market capitalization rate for a share of GRITO stock?

(a)7.56%

(b)8.23%

(c)10.50%

(d)12.15%

Answer: (d)

11.In the DDM model, if D1 and k are held constant, what will happen to the price of a stock if

the constant growth rate gets higher?

(a)the price of the stock will be higher

(b)the price of the stock will hold constant

(c)the price of the stock will be lower

(d)it cannot be determined from the information given

Answer: (a)