Financial Management - Study Mode

[#701] Tracking stock of company is also classified as
Correct Answer

(A) target stock

Explanation

Solution: Tracking stock of company is also classified as target stock. Target Stock means any Target Preferred Stock and/or any Target Common Stock.

[#702] 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%

[#703] 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.

[#704] 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.

[#705] Greater chance of lower actual return than expected return and greater variation is indicated by
Correct Answer

(B) larger standard deviation

Explanation

Solution: Greater chance of lower actual return than expected return and greater variation is indicated by larger standard deviation. The standard deviation is a statistic that measures the dispersion of a dataset relative to its mean and is calculated as the square root of the variance. The greater the standard deviation of securities, the greater the variance between each price and the mean, which shows a larger price range.