A share of stock is worth the present value of all the cash flows an investor in said share of stock expects to receive. Group of answer choices True False
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- The price of a stock is: Group of answer choices the future value of all expected future dividends, discounted at the investor’s required return. the present value of all expected future dividends, discounted at the investor’s required return. the present value of all expected future dividends, discounted at the dividend growth rate. the future value of all expected future dividends, discounted at the dividend growth rate.According to the basic Dividend Discount model, the value an investor should assign to a share of stock is dependent on the length of time he or she plans to hold the stock. Is the above statement True or False? Please Explain.In the general dividend-valuation model, the price of a share of stock is the present value of all expected future dividends. True False
- In the shareholder wealth maximization model, the value of a firm's stock is equal to the present value of all expected future ____ discounted at the stockholders' required rate of return.How do cash dividends affect the realized rate of return from investing in shares of common stock?When treasury stock is purchased for cash at more than its par value, what is the effect on total shareholders’ equity under each of the following methods?
- What options does a firm have to spend its free cash flow (after it has satisfied all interest obligations)? (Select the best choice below.) A. Use it to repurchase shares. B. Pay it out as dividends. C. Use it to make investments. D. All of the above.How does cumulative preferred stock differ from non-cumulative preferred stock? If you were a stockholder which type of stock would you prefer? Why? What is the difference between a cash dividend and a stock dividend?Q31 Which of the following is equal to the present value of all cash proceeds received by a stock investor? a. Dividend payout ratio b. Retention ratio c. Discount rate d. Value
- n the formula ke >= (D1/P0) + g, what does (D1/P0) represent? Select one: a. The expected capital gains yield from a common stock b. The interest payment from a bond c. The expected dividend yield from a common stock d. The dividend yield from a preferred stockSelect all the TRUE statements The goal of the corporate financial manager is to maximize the firm’s profit. The ask price of a stock is higher than the bid price. The bid price is the price at which an investor buys the stocks at. The are three main determinants of stock prices: future cash flow, timing of the cash flow, and risksOf the following metrics, which is most likely used in present value calculation of equity shares? Question options: Enterprise value Net assets Free cash flow
