FINAL EXAM MGT 5002 MULTIPLE CHOICE CHAPTER 9

Jun 27th, 2016
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(9-5) Required return 1). If in the opinion of a given investor a stock’s expected return exceeds its required return, this suggests that the investor thinks a. the stock is experiencing supernormal growth. b. the stock should be sold. c. the stock is a good buy. d. management is probably not trying to maximize the price per share. e. dividends are not likely to be declared. (9-1) Preemptive right 2). The preemptive right is important to shareholders because it a. allows managers to buy additional shares below the current market price. b. will result in higher dividends per share. c. is included in every corporate charter. d. protects the current shareholders against a dilution of their ownership interests. e. protects bondholders, and thus enables the firm to issue debt with a relatively low interest rate. (9-2) Classified stock 3). Companies can issue different classes of common stock. Which of the following statements concerning stock classes is CORRECT? a. All commo

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FINAL EXAM MGT 5002 MULTIPLE CHOICE CHAPTER 9(9-5) Required return1). If in the opinion of a given investor a stocks expected return exceeds its required return, thissuggests that the investor thinksa. the stock is experiencing supernormal growth.b. the stock should be sold.c. the stock is a good buy.d. management is probably not trying to maximize the price per share.e. dividends are not likely to be declared.(9-1) Preemptive right2). The preemptive right is important to shareholders because ita. allows managers to buy additional shares below the current market price.b. will result in higher dividends per share.c. is included in every corporate charter.d. protects the current shareholders against a dilution of their ownership interests.e. protects bondholders, and thus enables the firm to issue debt with a relatively low interest rate.(9-2) Classified stock3). Companies can issue different classes of common stock. Which of the following statementsconcerning stock classes is CORRECT?a. All common stocks fall into one of three classes: A, B, and C.b. All common stocks, regardless of class, must have the same voting rights.c. All firms have several classes of common stock.d. All common stock, regardless of class, must pay the same dividend.e. Some class or classes of common stock are entitled to more votes per share than other classes.(9-5) Constant growth model4). If a stocks dividend is expected to grow at a constant rate of 5% a year, which of

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