If a stock's dividend is expected to grow at a constant rate of eight percent in the future
and it has just paid a dividend of $1.25 a share, and you have an alternative investment of equal risk that will earn a 12 percent rate of return, what would you be willing to pay per share for this stock?
A) $31.25 B) $1.40 C) $1.25 D) $1.12
A
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You are a major stockholder of a large corporation. You have news from a credible source that the company's earnings report is going to indicate record losses
If you and other major stockholders receive the same news, what is your likely behavioral response and what impact will that have on the price of the company's stock?
The risk premium of corporate bonds typically increases
A) when the average price of corporate bonds increase. B) during a recession. C) when the interest rates on corporate bonds decreases. D) when the risk premium on treasury bonds increases.