Financial Management - Study Mode

[#781] An expected dividend yield is 5.5% and expected rate of return is 11.5% then constant growth rate would be
Correct Answer

(D) 6.00%

Explanation

Solution: Constant growth rate = Expected rate of return - Expected dividend yield = 11.5% - 5.5% = 6.00%

[#782] A right which controls and prevents transfer from current stockholders to other new stockholders is considered as
Correct Answer

(A) corporate charter

Explanation

Solution: A right which controls and prevents transfer from current stockholders to other new stockholders is considered as corporate charter. A corporate charter, also known as a "charter" or "articles of incorporation," is a written document filed with the Secretary of State (or registrar in Canada) by the founders of a corporation.

[#783] In market analysis, market multiple is multiplied by firm earning before interest, taxes, depreciation and amortization to calculate
Correct Answer

(B) firm total value

Explanation

Solution: In market analysis, market multiple is multiplied by firm earning before interest, taxes, depreciation and amortization to calculate firm total value. The value of the firm is measured as the sum of the value of the firm's equity and the value of the debt.

[#784] Which of the following is not true for capital budgeting?
Correct Answer

(B) Opportunity costs are excluded

[#785] Cash discount terms offered by trade creditors never be accepted because:
Correct Answer

(D) None of the above