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MCQs

Total Questions : 131 | Page 2 of 14 pages
Question 11. The preemptive right of the common stockholders are necessarily included in company's
  1.    laws
  2.    purchase chart
  3.    corporate charter
  4.    selling charter
 Discuss Question
Answer: Option C. -> corporate charter
Answer: (c).corporate charter
Question 12. The constant growth rate is 8% and an expected dividend yield is 5.4% then the expected rate of return would be
  1.    −3.4%
  2.    0.034
  3.    0.134
  4.    −13.4%
 Discuss Question
Answer: Option C. -> 0.134
Answer: (c).0.134
Question 13. The preferred stocks are also classified as
  1.    intrinsic preference
  2.    perpetuities
  3.    extrinsic preference
  4.    weak preference
 Discuss Question
Answer: Option B. -> perpetuities
Answer: (b).perpetuities
Question 14. The value of future dividends after the horizon date is classified as
  1.    hypothesis value
  2.    horizon value
  3.    terminal value
  4.    both b and c
 Discuss Question
Answer: Option D. -> both b and c
Answer: (d).both b and c
Question 15. The real rate of return, risk and expected inflation are the primary determinants of
  1.    minimum rate of return
  2.    accepted return
  3.    expected return
  4.    real risk free rate
 Discuss Question
Answer: Option A. -> minimum rate of return
Answer: (a).minimum rate of return
Question 16. The average rate of return which is required by all the investors of the company is classified as
  1.    extrinsic cost of capital
  2.    weighted average cost of capital
  3.    mean cost of capital
  4.    standard cost of cash
 Discuss Question
Answer: Option B. -> weighted average cost of capital
Answer: (b).weighted average cost of capital
Question 17. The value of stock is $900 and the required rate of return is 30% then the preferred dividend will be
  1.    270
  2.    27000
  3.    90
  4.    90
 Discuss Question
Answer: Option A. -> 270
Answer: (a).270
Question 18. A stock which is issued to meet specific needs of the company is considered as
  1.    classified stock
  2.    specific stock
  3.    needed stock
  4.    meeting stock
 Discuss Question
Answer: Option A. -> classified stock
Answer: (a).classified stock
Question 19. A situation in which an outside group solicit proxies to take control of the business is classified as
  1.    outside group
  2.    solicit process
  3.    proxy fight
  4.    controlled management
 Discuss Question
Answer: Option C. -> proxy fight
Answer: (c).proxy fight
Question 20. An actual rate of return is subtracted from expected growth rate then it is divided from dividend stockholders expect use for calculating
  1.    dividend growth model
  2.    actual growth model
  3.    constant growth model
  4.    variable growth model
 Discuss Question
Answer: Option C. -> constant growth model
Answer: (c).constant growth model

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