Financial Management - Study Mode
[#421] Present value of dividends which is expected to be provided in future is classified as an
Correct Answer
(A) intrinsic value of stock
Explanation
Solution: Present value of dividends which is expected to be provided in future is classified as an intrinsic value of stock. The intrinsic value of a stock, on the other hand, attempts to boil out the externals and value a company on its own merits. Internal factors like a firm's products, its management, and the strength of its brands in the marketplace determine intrinsic value. Investors are interested in cash available to stockholders.
[#422] Stock in large companies and own by people who are not active in management is classified as
Correct Answer
(C) publicly held stock
Explanation
Solution: Stock in large companies and own by people who are not active in management is classified as publicly held stock. A public company, publicly traded company, publicly held company, publicly listed company, or public limited company is a corporation whose ownership is dispersed among the general public in many shares of stock which are freely traded on a stock exchange or in over-the-counter markets.
[#423] Information which is reflected in current market prices with help of past price movements is classified as
Correct Answer
(C) weak form efficiency
Explanation
Solution: Information which is reflected in current market prices with help of past price movements is classified as weak form efficiency. Weak form efficiency states that past prices, historical values and trends can't predict future prices. Weak form efficiency is an element of efficient market hypothesis. Weak form efficiency states that stock prices reflect all current information.
[#424] Capital gain is Rs 3 and capital gains yield is 6% then beginning price will be
Correct Answer
(C) Rs 50.00
Explanation
Solution: Beginning price = Capital gain / Capital gains yeild percentage = Rs. 3 / 6% = Rs. 50.00
[#425] Growth rate which is predicted by marginal investors for dividends is classified as
Correct Answer
(A) expected growth rate
Explanation
Solution: Growth rate which is predicted by marginal investors for dividends is classified as expected growth rate. Growth rates refer to the percentage change of a specific variable within a specific time period and given a certain context.