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Last year, when the stock of Alpha Minerals was selling for $49.50 a share, the dividend yield was 3.4 percent. Today, the stock is selling for $41 a share. What is the total return on this stock if the company maintains a constant dividend growth rate of 2.2 percent?


A) 6.13 percent
B) 6.58 percent
C) 6.40 percent
D) 6.47 percent
E) 6.38 percent

F) C) and D)
G) A) and C)

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Best Ever Toys just paid its annual dividend of $1.78 per share. The required return is10.6 percent and the dividend growth rate is 1.23 percent. What is the expected value of this stock five years from now?


A) $20.19
B) $20.44
C) $22.06
D) $18.45
E) $19.78

F) B) and C)
G) A) and C)

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Most trades on the NYSE are executed:


A) by floor brokers on the exchange floor.
B) independent brokers on the exchange floor.
C) electronically.
D) by designated market makers of the floor of the exchange.
E) bydealers.

F) A) and E)
G) None of the above

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The specific location on the floor of an exchange where a particular security is traded is called a:


A) box office.
B) Figure 6.
C) post.
D) trading booth.
E) seat.

F) B) and E)
G) All of the above

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Vegan Delite stock is valued at $68.60 a share. The company pays a constant annual dividend of $2.40 per share. What is the total return on this stock?


A) 3.62 percent
B) 4.00 percent
C) 3.50 percent
D) 3.39 percent
E) 3.82 percent

F) A) and B)
G) B) and E)

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On which one of the following dates do dividends become a liability of the issuer for accounting purposes?


A) First day of the fiscal year in which the dividend is expected to be paid
B) Twelve months prior to the expected dividend payment date
C) On the date the board declares the dividend
D) On the date the company announces the dividend to the public
E) On the date of payment

F) A) and D)
G) B) and E)

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C

The capital gains yield equals which one of the following?


A) Total yield
B) Required rate of return
C) Market rate of return
D) Dividend yield
E) Dividend growth rate

F) A) and B)
G) B) and D)

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The dividend yield is defined as:


A) the last annual dividend divided by the current market price per share.
B) the last annual dividend divided by the current book value per share.
C) next year's expected dividend divided by the current market price per share.
D) next year's expected dividend divided by the current book value per share.
E) next year's expected dividend divided by the par value per share.

F) A) and B)
G) C) and D)

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C

Laura owns 6,700 shares of GP Global stock worth $92,460. The firm has 15,000 shares outstanding. Each share is entitled to one vote under the straight voting policy of the firm. The next election is in four months at which time four directors are up for election. How much more must Laura invest in this firm to guarantee her election to the board?


A) $0
B) $6,554.00
C) $11,053.80
D) $8,406.15
E) $14,478.80

F) C) and E)
G) A) and E)

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A broker is an agent who:


A) trades on the floor of an exchange for himself or herself.
B) buys and sells from inventory.
C) offers new securities for sale to dealers only.
D) is ready to buy or sell at any time.
E) brings buyers and sellers together.

F) D) and E)
G) B) and D)

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Which one of the following features applies to NASDAQ but not the NYSE?


A) Trading in the crowd
B) Multiple market maker system
C) SuperDot
D) Broker market
E) Physical trading floor

F) A) and D)
G) A) and C)

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B

To be a member of the NYSE, you must:


A) be a primary dealer.
B) buy a seat.
C) own a trading license.
D) be registered as a floor trader.
E) be a DMM.

F) B) and D)
G) None of the above

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The Chip Dip Co. has 685,500 shares of stock outstanding, grants one vote per share, and uses straight voting. How many shares must you control to guarantee that you will be elected to the firm's board of directors if there are five open seats?


A) 335,167 shares
B) 345,134 shares
C) 345,876 shares
D) 342,751 shares
E) 337,134 shares

F) None of the above
G) B) and E)

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The Glass Ceiling paid an annual dividend of $1.64 per share last year and just announced that future dividends will increase by 1.3 percent annually. What is the amount of the expected dividend in Year 6?


A) $1.43
B) $1.75
C) $1.46
D) $1.77
E) $1.58

F) A) and B)
G) A) and C)

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Which one of the following will increase the current value of a stock?


A) Decrease in the dividend growth rate
B) Increase in the required return
C) Increase in the market rate of return
D) Decrease in the expected dividend for next year
E) Increase in the capital gains yield

F) C) and E)
G) C) and D)

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This morning, you purchased a stock that will pay an annual dividend of $1.90 per share next year. You require a 12 percent rate of return and the dividend increases at 3.5 percent annually. What will your capital gain be in dollars on this stock if you sell it three years from now?


A) $2.43
B) $2.51
C) $2.63
D) $2.87
E) $2.92

F) A) and D)
G) All of the above

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TMS just paid an annual dividend of $2.84 per share on its stock. The dividends are expected to grow at a constant rate of 1.85 percent per year. If investors require a rate of return of 10.4 percent, what will be the stock price be in Year 11?


A) $41.71
B) $40.64
C) $35.75
D) $41.39
E) $42.57

F) A) and D)
G) All of the above

Correct Answer

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Which one of the following is an electronic network that enables Katie to sell her shares of ABC stock directly to Marti?


A) SuperDOT
B) POST
C) ECN
D) SEAT
E) eNET

F) None of the above
G) A) and B)

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Juniper Trees has earnings per share of $1.38, all of which is added to retained earnings. What is the value of a share of its stock if the PE ratio is 9.8 and market-to-book ratio is 2.5?


A) $13.52
B) $13.67
C) $15.30
D) $33.80
E) $34.18

F) D) and E)
G) A) and B)

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Jensen Shipping has four open seats on its board of directors. How many shares will a shareholder need to control to ensure that his or her candidate is elected to the board given the fact that the firm uses straight voting? Assume each share receives one vote.


A) Twenty percent of the shares plus one share
B) Twenty-five percent of the shares plus one share
C) One-third of the shares plus one share
D) Fifty percent of the shares plus one share
E) Fifty-one percent of the shares plus one share

F) A) and D)
G) C) and E)

Correct Answer

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