10.Which of the following statement on stock valuation is incorrect? a.In dividend discount model, the stock value is the present value of all future dividends. b.We may use the dividend discount model to value all firms.  c.Enterprise value is the sum of equity and debt minus cash.  d.We may use price-earnings ratio to compute the value to comparable firms.

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Q: 7. Free Cash Flow to Equity can be less than net income.(true or false with reason)

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Q: What are flotation costs?

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A: NOTE: Since you have posted a question with multiple sub-parts, we will solve first three sub-parts…

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A: Total Return is comprised of capital gain yield and dividend yield.

Stock Yields

The stock yield is otherwise known as the dividend yield. The dividend yield is an annual payment of the stock dividends to the holder of a firm’s stock. The dividend yield is a financial ratio to measure the value of dividend payout every year for the relative stock price. The yield of a stock is usually shown in a percentage that discloses the expected future earnings from stock depending on the current stock price in the future. Stock yield will change depending on the market fluctuations and in accordance with the market fluctuations, the dividends will be increased or decreased by the firm.