stuff for 12345678

You are interested in buying a share of stock in CAD Corporation. You expect a dividend payment of $0.50 next year and that the dividend will grow by 5% per year thereafter. You desire a 10% return on your purchase. According to the Gordon growth model, what is the maximum price you would pay for a share of this stock?

10

Consider a share of stock in a company that will pay a dividend of $20 one year from today and immediately liquidate its assets. Your expected share of the liquidated assets is $5. Your time value of money is such that you consider $1.05 a year from today is equivalent to $1.00 today. What is the maximum you would be willing to pay for a share of stock in this company? Group of answer choices

23.81

If Mercury Corporation's stock is currently trading at $40.45 per share with an expected earnings per share of $1.67, Mercury's PE ratio would be

24.22

Consider a share of stock in a company that will pay a dividend of $25 one year from today and immediately liquidate its assets. Your expected share of the liquidated assets is $5. Your time value of money is such that you consider $1.05 a year from today is equivalent to $1.00 today. What is the maximum you would be willing to pay for a share of stock in this company? Group of answer choices

28.57

consider a share of stock in a company that will pay a dividend of $25 one year from today and immediately liquidate its assets. Your expected share of the liquidated assets is $5. Your time value of money is such that you consider $1.05 a year from today is equivalent to $1.00 today. What is the maximum you would be willing to pay for a share of stock in this company?

28.57

You are interested in buying a share of stock in LMU Company. You expect a dividend payment of $10 next year and that the dividend will grow by 6% per year thereafter. You desire an 8% return on your purchase. According to the Gordon growth model, what is the maximum price you would pay for a share of this stock?

500

Schneider Manufacturing Corporation has a PE ratio of $32.17. It has an expected earnings per share of $1.93. What is the current stock price for Schneider?

62.09

What is the PE ratio? Is a "high" PE ratio a good thing, or is a "low" PE ratio a good thing? Explain.

High is generally a good thing because you can expect higher earnings but it can also signify that a stock is overvalued.

Randolph & Chase Electronics has just declared an initial public offering (IPO). This means that

Randolph & Chase will be selling its shares in the primary market to the public for the first time*

Since investors in the stock market are interested in owning part of the corporation, the stock market is also being referred to as

equity market

The stocks that make up the S&P 500 are the stocks of the 500 biggest corporations in the United States.

false

You have just read an article in today's Wall Street Journal that states that the US economy is growing at a healthy 3% per year, US interest rates are falling, and emerging economies around the world are growing at a healthy 7% per year. Based on this information, you predict that US stock prices will

increase

Interest rates and stock prices tend to be

inversely related

What is true of the secondary market for stocks?

majority of transaction

When people think their forecasts of future corporate earnings are more accurate than they actually are, they may be exhibiting which of the following behavioral maxims?

overconfidence

Which of the following is NOT true of stock dividends?

paid out of long term assets

Paul is an economist who believes the strong form of the efficient market hypothesis. Thus, Paul believes that the stock market is a good approximation of a(n) __________ market.

perfectly competitive

History tells us that stock prices tend to be

procyclical

The focus of the Securities and Exchange Commission (SEC) is on

reducing asymetric

Consider the efficient market hypothesis as it relates to the stock market. If the weak form of efficiency holds, then which of these statements is true?

reflects all cant capture all private

The amount that stockholders are paid at the liquidation of a corporation after taxes, debts, and other claims have been satisfied is called Group of answer choices

residual

There have been cases where people with inside information have illegally traded in the stock market, earning disproportionately high returns. What does this suggest?

strong form doesnt hold

Which of these is true of the Dow Jones Industrial Average?

t is a price-weighted average of 30 large industrial stocks, and the divisor must be adjusted for stock splits

To be a part of the Wilshire 5000, all of the following criteria must be met EXCEPT

the corporation must have net earnings of at least $50 million.

One of the main reasons why savers wish to purchase stocks is because

they want to share in a corporations future profits

A flaw of the dividend discount model is that it assumes that a corporation's dividends will remain constant forever.

true

Keenan uses heuristics to make decisions about stocks. This means that Keenan relies on all of the following EXCEPT

all relevant info