Fin 310 Part 2

Financial instruments are subject to full

Disclosure requirements

Financial executive must design

Financial securities to meet the needs of the firm and its investors

The principal payment at maturity attached to the bond is called the

Par Value

At the end of fiscal year 2011, Crane Industries, Inc.'s stock price was $30.75. A year later it was $34.88. Per share dividends over the year were 0.55$, while earnings per share were $1.33. What was the dividend yield in fiscal year 2012?

1.79% = Per Share dividends / Stock price

At the end of fiscal year 2011, Crane Industries, Inc.'s stock price was $30.75. A year later it was $34.88. Per share dividends over the year were $0.55, while earnings per share were $1.33. What was the percentage change in the share price in fiscal year 2012?

13.42 = (New stock price - original stock price) / original stock price = 4.13 / Original stock price = 13.43%

Financial instruments are claims against

A company's cash flows and assets

Which of the following securities has a purely fixed claim against a firm's cash flows?

Bonds

Which of the following securities has a purely residual claim against a firm's cash flows?

Common Stock

Which accurately orders the rate of return on a financial securities from highest to lowest over most of recorded market history (the 1900-2015 period)?

Common stocks long-term corporate bonds long-term government bonds short-term government bills

Interest payment on a bond is called the

Coupon