Financial Management - Study Mode

[#596] Capital gains yield is multiplied for beginning price to calculate
Correct Answer

(A) capital gain

Explanation

Solution: Capital gains yield is multiplied for beginning price to calculate capital gain. Capital gain is a rise in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold.

[#597] Constant growth rate is 9.5% and an expected rate of return is 13.5% then expected dividend yield would be
Correct Answer

(C) 4.00%

Explanation

Solution: Expected dividend yield = Expected rate of return - Constant growth rate = 13 5% - 9.5% = 4.00%

[#598] Paid dividend is Rs 20 and current price is Rs 50 then dividend yield will be
Correct Answer

(A) 40.00%

Explanation

Solution: Dividend yield = Dividend paid / Current price * 100 = 20 / 50 * 100 = 40.00%

[#599] Stock in small companies, owned by few people but not actively traded is classified as
Correct Answer

(A) closely held stock

Explanation

Solution: Stock in small companies, owned by few people but not actively traded is classified as closely held stock. A closely-held stock is a circumstance wherein a company's common shares are predominantly owned by one individual owner or by a small group of controlling stockholders.

[#600] Type of stock which have characteristics of bonds and common stock is classified as
Correct Answer

(D) preferred stock

Explanation

Solution: Type of stock which have characteristics of bonds and common stock is classified as preferred stock. Preferred stock refers to a class of ownership that has a higher claim on assets and earnings than common stock has.