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problem1: Pluto's is offering a preferred stock for sale. This stock will pay an annual dividend of $6. If your required return is 6 percent, how much are you willing to pay for one share of this stock ?

[A] $70.50

[B] $74.73

[C] $100.00

[D] $62.74

[E] $66.51

problem2: Preferred stock:

[A] Pays a guaranteed dividend

[B] Has a higher claim in liquidation than the common stock.

[C] Is a form of debt from a tax point of view.

[D] Is always granted voting rights.

[E] Is a form of debt from legal perspective.

problem3: The type of security which represents ownership in a firm without priority for dividends or priority in a bankruptcy is called stock.

[A] Common

[B] Preferred

[C] Treasury

[D] Convertibles

[E] Senior

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M920910

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