MGT 5002 FINAL EXAM MULTIPLE CHOICE CHAPTER 9
(9-5) Required return
1). If in the opinion of a given investor a stock’s expected return exceeds its required return, this
suggests that the investor thinks
a. the stock is experiencing supernormal growth.
b. the stock should be sold.
c. the stock is a good buy.
d. management is probably not trying to maximize the price per share.
e. dividends are not likely to be declared.
(9-1) Preemptive right
2). The preemptive right is important to shareholders because it
a. allows managers to buy additional shares below the current market price.
b. will result in higher dividends per share.
c. is included in every corporate charter.
d. protects the current shareholders against a dilution of their ownership interests.
e. protects bondholders, and thus enables the firm to issue debt with a relatively low interest rate.
(9-2) Classified stock
3). Companies can issue different classes of common stock. Which of the following statements
concerning stock classes is CORRECT?
a. All common stocks fall into one of three classes: A, B, and C.
(9-5) Required return
1). If in the opinion of a given investor a stock’s expected return exceeds its required return, this
suggests that the investor thinks
a. the stock is experiencing supernormal growth.
b. the stock should be sold.
c. the stock is a good buy.
d. management is probably not trying to maximize the price per share.
e. dividends are not likely to be declared.
(9-1) Preemptive right
2). The preemptive right is important to shareholders because it
a. allows managers to buy additional shares below the current market price.
b. will result in higher dividends per share.
c. is included in every corporate charter.
d. protects the current shareholders against a dilution of their ownership interests.
e. protects bondholders, and thus enables the firm to issue debt with a relatively low interest rate.
(9-2) Classified stock
3). Companies can issue different classes of common stock. Which of the following statements
concerning stock classes is CORRECT?
a. All common stocks fall into one of three classes: A, B, and C.
