315 quiz ch 6
Differential growth refers to the stock of a firm that increases its dividend by
varying rates over a period of time.
The total return on a stock is equal to
Capital gains yield + Dividend yield
The voting procedure whereby shareholders may cast all of their votes for one candidate for the board of directors is called _____ voting
Cumulative
The expected dividend yield is equal to
Expected cash dividend / Current stock price.
The market in which new securities are originally sold to investors is called the _____ market
Primary
The voting procedure where a shareholder grants authority to another individual to vote his/her shares is called _____ voting
Proxy
A dealer will buy at the ____ price and sell at the _____ price
bid; ask
The rate at which a stock's price is expected to appreciate (or depreciate) is called the _____ yield
capital gains
A market participant who buys and sells securities from inventory is called a
dealer
A stock that pays a constant annual dividend will have a market price that
decreases when the market rate of return increases.
The EV/EBITDA ratio has an advantage over the PE ratio in situations where comparisons are being made of firms that vary based on their
degree of leverage
Greener Grass Co. pays a constant annual dividend of $1 a share and has 1,000 shares of common stock outstanding. The company
must still declare each dividend before it becomes an actual company liability.
The underlying assumption of the dividend growth model is that a stock is worth
the present value of the future income provided by that stock.