Fundamentals of Corporate Finance, 3e (Berk/DeMarzo/Harford)
Chapter 7 Stock Valuation
7.1 Stock Basics
1) The ownership in a corporation is divided into shares of stock, which carry rights to a
share in the profits of the firm through future dividend payments.
Answer: TRUE
Diff: 1 Var: 1
Skill: Conceptual
AACSB Objective: Analytic Skills
Author: DS
Question Status: Revised
2) What are dividend payments?
A) payments made to a company by investors for a share of the ownership of that company
B) incremental increases in the value of the stock held by an investor due to rises in share
price
C) the difference between the original cost price of a share and the price an investor
receives when that share is sold
D) a share of the profits paid to each shareholder on the basis of the number of shares they
hold
Answer: D
Diff: 1 Var: 1
Skill: Conceptual
AACSB Objective: Analytic Skills
Author: DS
Question Status: Revised
1
Copyright © 2015 Pearson Education, Inc.
,3)
The above screen shot from Google Finance shows basic stock information for PepsiCo. If
you owned of PepsiCo for the period shown, how much would you have earned in
dividend payments?
A) $480.00
B) $658.44
C) $584.80
D) $688.00
Answer: D
Explanation: D) 1600 × $0.43 = $688.00
Diff: 1 Var: 21
Skill: Analytical
AACSB Objective: Analytic Skills
Author: DS
Question Status: Revised
2
Copyright © 2015 Pearson Education, Inc.
, Use the figure for the question(s) below.
4) The above screen shot from Google Finance shows the basic stock information for
Logitech International SA (USA). What is Logitech International SA (USA)'s ticker symbol?
A) LIS
B) LOGITECH
C) LOG
D) LOGI
Answer: D
Diff: 1 Var: 1
Skill: Conceptual
AACSB Objective: Analytic Skills
Author: DS
Question Status: Previous Edition
3
Copyright © 2015 Pearson Education, Inc.
Chapter 7 Stock Valuation
7.1 Stock Basics
1) The ownership in a corporation is divided into shares of stock, which carry rights to a
share in the profits of the firm through future dividend payments.
Answer: TRUE
Diff: 1 Var: 1
Skill: Conceptual
AACSB Objective: Analytic Skills
Author: DS
Question Status: Revised
2) What are dividend payments?
A) payments made to a company by investors for a share of the ownership of that company
B) incremental increases in the value of the stock held by an investor due to rises in share
price
C) the difference between the original cost price of a share and the price an investor
receives when that share is sold
D) a share of the profits paid to each shareholder on the basis of the number of shares they
hold
Answer: D
Diff: 1 Var: 1
Skill: Conceptual
AACSB Objective: Analytic Skills
Author: DS
Question Status: Revised
1
Copyright © 2015 Pearson Education, Inc.
,3)
The above screen shot from Google Finance shows basic stock information for PepsiCo. If
you owned of PepsiCo for the period shown, how much would you have earned in
dividend payments?
A) $480.00
B) $658.44
C) $584.80
D) $688.00
Answer: D
Explanation: D) 1600 × $0.43 = $688.00
Diff: 1 Var: 21
Skill: Analytical
AACSB Objective: Analytic Skills
Author: DS
Question Status: Revised
2
Copyright © 2015 Pearson Education, Inc.
, Use the figure for the question(s) below.
4) The above screen shot from Google Finance shows the basic stock information for
Logitech International SA (USA). What is Logitech International SA (USA)'s ticker symbol?
A) LIS
B) LOGITECH
C) LOG
D) LOGI
Answer: D
Diff: 1 Var: 1
Skill: Conceptual
AACSB Objective: Analytic Skills
Author: DS
Question Status: Previous Edition
3
Copyright © 2015 Pearson Education, Inc.
