Chapter 9: Stocks and Their Valuation – Flashcards
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An increase in a firm's expected growth rate would cause its required rate of return to ...
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possibly increase, possibly decrease, or possibly remain constant.
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If in the opinion of a given investor a stock's expected return exceeds its required return, this suggest that the investor thinks...
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the stock is a good buy.
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The preemptive right is important to shareholders because it ...
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protects the current shareholders against a dilution of their ownership interests.
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If a stock's dividend is expected to grow at a constant rate of 5% a year, which of the following statements is CORRECT? The stock is in equilibrium.
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The stock's price one year from now is expected to 5% above the current price.
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Which of the following statements is CORRECT?
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The preferred stock of a given firm is generally less risky to investors than the same firm's common stock.
