Financial Management - Study Mode

[#511] Preferred stocks are also classified as
Correct Answer

(B) perpetuities

Explanation

Solution: Preferred stocks are also classified as perpetuities. Perpetuity refers to an infinite amount of time. In finance, perpetuity is a constant stream of identical cash flows with no end.

[#512] After-the-fact rate of return often consider as realized or actual can be denoted
Correct Answer

(B) r bar s

Explanation

Solution: After-the-fact rate of return often consider as realized or actual can be denoted r bar s.

[#513] In expected rate of return for constant growth, dividends are expected to grow but with the
Correct Answer

(A) constant rate

Explanation

Solution: In expected rate of return for constant growth, dividends are expected to grow but with the constant rate. The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR).

[#514] Expected capital gain is Rs 20 and expected final price is Rs 50 then original investment will be
Correct Answer

(A) Rs 30.00

Explanation

Solution: Investment = Final price - Capital gain = 50 - 20 = 30

[#515] Preferred dividend is Rs 60 and required rate of return is 20% then value of preferred stock will be
Correct Answer

(D) Rs 300.00

Explanation

Solution: Value of preferred stock = Dividend/required rate of return x 100 = 60/20 x 100 = 300