r = 1.0994/1.032 − 1
r = .06531, or 6.531%
FV = $2 million = C [(1.0653135 − 1)/.06531]
FV = $16,017
165) B
r = 1.0803/1.0266 − 1
r = .0523, or 5.23%
166) A
r = 1.0827/1.0224 − 1
r = .0590, or 5.90%
Student name:
1) You want a seat on the board of directors of Four Keys, Incorporated. The company has
240,000 shares of stock outstanding and the stock sells for $79 per share. There are currently 4
seats up for election. The company uses straight voting. How many shares do you need to
guarantee that you will be elected to the board?
1)
A) 108,001 shares
B) 48,001 shares
C) 60,000 shares
D) 120,001 shares
E) 84,001 shares
Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-02 Show how to value stocks using multiples.
Topic : Shareholder voting
Difficulty : 1 Basic
Section : 8.2 Some Features of Common and Preferred Stocks
Bloom's : Understand
,2) You want a seat on the board of directors of Red Cow, Incorporated. The company has
310,000 shares of stock outstanding and the stock sells for $55 per share. There are currently 3
seats up for election. The company uses straight voting. How much will it cost you to guarantee
that you will be elected to the board?
2)
A) $8,525,055
B) $6,393,805
C) $4,262,555
D) $5,683,333
E) $7,672,550
Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-02 Show how to value stocks using multiples.
Topic : Shareholder voting
Difficulty : 1 Basic
Section : 8.2 Some Features of Common and Preferred Stocks
Bloom's : Understand
3) You want a seat on the board of directors of Four Keys, Incorporated. The company has
255,000 shares of stock outstanding and the stock sells for $48 per share. There are currently 3
seats up for election. If the company uses cumulative voting, how many shares do you need to
guarantee that you will be elected to the board?
3)
A) 63,751 shares
B) 57,376 shares
C) 127,501 shares
D) 85,000 shares
E) 95,626 shares
,Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-02 Show how to value stocks using multiples.
Topic : Shareholder voting
Difficulty : 1 Basic
Section : 8.2 Some Features of Common and Preferred Stocks
Bloom's : Understand
4) You want a seat on the board of directors of Zeph, Incorporated. The company has
225,000 shares of stock outstanding and the stock sells for $66 per share. There are currently 3
seats up for election. If the company uses cumulative voting, how much will it cost you to
guarantee that you will be elected to the board?
4)
A) $7,087,584
B) $4,252,576
C) $9,450,084
D) $6,300,000
E) $3,712,566
Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-02 Show how to value stocks using multiples.
Topic : Shareholder voting
Difficulty : 1 Basic
Section : 8.2 Some Features of Common and Preferred Stocks
Bloom's : Understand
5) Michael's, Incorporated, just paid $2.70 to its shareholders as the annual dividend.
Simultaneously, the company announced that future dividends will be increasing by 5.8 percent.
If you require a rate of return of 10 percent, how much are you willing to pay today to purchase
one share of the company's stock?
5)
, A) $70.71
B) $34.01
C) $68.01
D) $18.08
E) $28.57
Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-01 Explain how stock prices depend on future dividends and dividend growth.
Section : 8.1 Common Stock Valuation
Topic : Constant-growth stock
Difficulty : 1 Basic
Bloom's : Understand
6) Stoneheart Group is expected to pay a dividend of $3.13 next year. The company's
dividend growth rate is expected to be 4.1 percent indefinitely and investors require a return of
11.5 percent on the company's stock. What is the stock price?
6)
A) $40.18
B) $42.30
C) $38.07
D) $27.22
E) $44.03
Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-01 Explain how stock prices depend on future dividends and dividend growth.
Section : 8.1 Common Stock Valuation
Topic : Constant-growth stock
Difficulty : 1 Basic
Bloom's : Understand
r = .06531, or 6.531%
FV = $2 million = C [(1.0653135 − 1)/.06531]
FV = $16,017
165) B
r = 1.0803/1.0266 − 1
r = .0523, or 5.23%
166) A
r = 1.0827/1.0224 − 1
r = .0590, or 5.90%
Student name:
1) You want a seat on the board of directors of Four Keys, Incorporated. The company has
240,000 shares of stock outstanding and the stock sells for $79 per share. There are currently 4
seats up for election. The company uses straight voting. How many shares do you need to
guarantee that you will be elected to the board?
1)
A) 108,001 shares
B) 48,001 shares
C) 60,000 shares
D) 120,001 shares
E) 84,001 shares
Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-02 Show how to value stocks using multiples.
Topic : Shareholder voting
Difficulty : 1 Basic
Section : 8.2 Some Features of Common and Preferred Stocks
Bloom's : Understand
,2) You want a seat on the board of directors of Red Cow, Incorporated. The company has
310,000 shares of stock outstanding and the stock sells for $55 per share. There are currently 3
seats up for election. The company uses straight voting. How much will it cost you to guarantee
that you will be elected to the board?
2)
A) $8,525,055
B) $6,393,805
C) $4,262,555
D) $5,683,333
E) $7,672,550
Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-02 Show how to value stocks using multiples.
Topic : Shareholder voting
Difficulty : 1 Basic
Section : 8.2 Some Features of Common and Preferred Stocks
Bloom's : Understand
3) You want a seat on the board of directors of Four Keys, Incorporated. The company has
255,000 shares of stock outstanding and the stock sells for $48 per share. There are currently 3
seats up for election. If the company uses cumulative voting, how many shares do you need to
guarantee that you will be elected to the board?
3)
A) 63,751 shares
B) 57,376 shares
C) 127,501 shares
D) 85,000 shares
E) 95,626 shares
,Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-02 Show how to value stocks using multiples.
Topic : Shareholder voting
Difficulty : 1 Basic
Section : 8.2 Some Features of Common and Preferred Stocks
Bloom's : Understand
4) You want a seat on the board of directors of Zeph, Incorporated. The company has
225,000 shares of stock outstanding and the stock sells for $66 per share. There are currently 3
seats up for election. If the company uses cumulative voting, how much will it cost you to
guarantee that you will be elected to the board?
4)
A) $7,087,584
B) $4,252,576
C) $9,450,084
D) $6,300,000
E) $3,712,566
Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-02 Show how to value stocks using multiples.
Topic : Shareholder voting
Difficulty : 1 Basic
Section : 8.2 Some Features of Common and Preferred Stocks
Bloom's : Understand
5) Michael's, Incorporated, just paid $2.70 to its shareholders as the annual dividend.
Simultaneously, the company announced that future dividends will be increasing by 5.8 percent.
If you require a rate of return of 10 percent, how much are you willing to pay today to purchase
one share of the company's stock?
5)
, A) $70.71
B) $34.01
C) $68.01
D) $18.08
E) $28.57
Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-01 Explain how stock prices depend on future dividends and dividend growth.
Section : 8.1 Common Stock Valuation
Topic : Constant-growth stock
Difficulty : 1 Basic
Bloom's : Understand
6) Stoneheart Group is expected to pay a dividend of $3.13 next year. The company's
dividend growth rate is expected to be 4.1 percent indefinitely and investors require a return of
11.5 percent on the company's stock. What is the stock price?
6)
A) $40.18
B) $42.30
C) $38.07
D) $27.22
E) $44.03
Question Details
AACSB : Analytical Thinking
Accessibility : Screen Reader Compatible
Accessibility : Keyboard Navigation
Learning Objective : 08-01 Explain how stock prices depend on future dividends and dividend growth.
Section : 8.1 Common Stock Valuation
Topic : Constant-growth stock
Difficulty : 1 Basic
Bloom's : Understand
