Corporate Finance 10th Edition test bank ch09

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1、ch09Student:___________________________________________________________________________1.Thestockvaluationmodelthatdeterminesthecurrentstockpricebydividingthenextannualdividendamountbytheexcessofthediscountratelessthedividendgrowthrateiscalledthe_____model.A.zerogro

2、wthB.dividendgrowthC.capitalpricingD.earningscapitalizationE.differentialgrowth2.Nextyear'sannualdividenddividedbythecurrentstockpriceiscalledthe:A.yieldtomaturity.B.totalyield.C.dividendyield.D.capitalgainsyield.E.earningsyield.3.Therateatwhichastock'spriceisexpect

3、edtoappreciate(ordepreciate)iscalledthe_____yield.A.currentB.totalC.dividendD.capitalgainsE.earnings4.Aformofequitywhichreceivesnopreferentialtreatmentineitherthepaymentofdividendsorinbankruptcydistributionsiscalled_____stock.A.dualclassB.cumulativeC.deferredD.prefe

4、rredE.common5.Paymentsmadebyacorporationtoitsshareholders,intheformofeithercash,stockorpaymentsinkind,arecalled:A.retainedearnings.B.netincome.C.dividends.D.redistributions.E.infusedequity.6.Theconstantdividendgrowthmodelis:A.generallyusedinpracticebecausemoststocks

5、haveaconstantgrowthrate.B.generallyusedinpracticebecausethehistoricalgrowthrateofmoststocksisconstant.C.generallynotusedinpracticebecausemoststocksgrowatanonconstantrate.D.generallynotusedinpracticebecausetheconstantgrowthrateisusuallyhigherthantherequiredrateofretu

6、rn.E.basedontheassumptionDow30representsagoodestimateofthemarketindex.7.Theconstantdividendgrowthmodel:I.assumesthatdividendsincreaseataconstantrateforever.II.canbeusedtocomputeastockpriceatanypointoftime.III.statesthatthemarketpriceofastockisonlyaffectedbytheamount

7、ofthedividend.IV.considerscapitalgainsbutignoresthedividendyield.A.IonlyB.IIonlyC.IIIandIVonlyD.IandIIonlyE.I,II,andIIIonly8.Theunderlyingassumptionofthedividendgrowthmodelisthatastockisworth:A.thesameamounttoeveryinvestorregardlessoftheirdesiredrateofreturn.B.thepr

8、esentvalueofthefutureincomewhichthestockgenerates.C.anamountcomputedasthenextannualdividenddividedbythemarketrateofreturn.D.thesameamounta