You passed this Milestone
18 questions were answered correctly.
2 questions were answered incorrectly.
1
You would like to have $30,000 in an account after five years' time.
If the account earns 3% compounded interest yearly, how much
would you have to deposit today?
$29,126
$28,092
$25,878
$26,087
CONCEPT
Present Value, Single Cash Flows
2
Select the pairing that is correctly matched.
Common stock: the issuer must honor any missed dividend payments
Preferred stock: stockholder receives interest from the issuer
Common stock: the value of the stock is dependant upon the overall value of
the company
Preferred stock: cannot be converted for common stock shares
CONCEPT
Rules and Rights of Common and Preferred Stock
3
Select one advantage of an annuity for a borrower.
,
The sum of all the payments will be less than the original loan amount.
The payment amount may go down if interest rates fall.
It can be easier to make regular payments rather than a single lump sum.
Annuities do not charge interest.
CONCEPT
Annuities
4
Select the statement that is true of common stock.
Companies issue dividends to common stockholders before preferred
stockholders.
Common stockholders do not have a right of first refusal when new stock is
issued.
Common stock has a stronger claim to a company's assets than preferred
stock.
Despite having fewer financial protections, common stock typically
outperforms preferred stock.
CONCEPT
Types of Stock
5
Determine the value of a stock with the following variables using
the constant growth model:
Current annual dividend: $1.30 per share
Required return rate: 7%
Constant growth rate: 5%
$65.00
18 questions were answered correctly.
2 questions were answered incorrectly.
1
You would like to have $30,000 in an account after five years' time.
If the account earns 3% compounded interest yearly, how much
would you have to deposit today?
$29,126
$28,092
$25,878
$26,087
CONCEPT
Present Value, Single Cash Flows
2
Select the pairing that is correctly matched.
Common stock: the issuer must honor any missed dividend payments
Preferred stock: stockholder receives interest from the issuer
Common stock: the value of the stock is dependant upon the overall value of
the company
Preferred stock: cannot be converted for common stock shares
CONCEPT
Rules and Rights of Common and Preferred Stock
3
Select one advantage of an annuity for a borrower.
,
The sum of all the payments will be less than the original loan amount.
The payment amount may go down if interest rates fall.
It can be easier to make regular payments rather than a single lump sum.
Annuities do not charge interest.
CONCEPT
Annuities
4
Select the statement that is true of common stock.
Companies issue dividends to common stockholders before preferred
stockholders.
Common stockholders do not have a right of first refusal when new stock is
issued.
Common stock has a stronger claim to a company's assets than preferred
stock.
Despite having fewer financial protections, common stock typically
outperforms preferred stock.
CONCEPT
Types of Stock
5
Determine the value of a stock with the following variables using
the constant growth model:
Current annual dividend: $1.30 per share
Required return rate: 7%
Constant growth rate: 5%
$65.00
