Consider a perpetual preferred share paying a fixed dividend. What will happen to the market value of the share if the dividend yield rate decreases? The market value will decrease. The market value will increase. The market value will remain the same.

Explain why current yield changes even though the income from the coupon is constant.

Two constant growth stocks are in equilibrium, have the same price, and have the same required rate of return. Which of the following statements is CORRECT? a. If one stock has a higher dividend yield, it must also have a lower dividend growth rate. b. If one stock has a higher dividend yield, it must also have a higher dividend growth rate. c. The two stocks must have the same dividend growth rate. d. The two stocks must have the same dividend yield. e. The two stocks must have the same dividend per share.

Firms with higher expected growth opportunities usually sell for: Select one: O a. the same price earnings multiple for all firms. b. a price that depends on the payout ratio only. c.a price independent of the P/E. O d. a higher price earnings multiple. O e. a lower price earnings multiple.

Please help by telling me the correct awnser   The value of an ordinary shareSelect one or more:a. Will fall if future profit forecasts are higher than expectedb. Is always at its fundamental valuec. Can rise and fall along with market sentimentd. Will rise if a firm introduces some cost saving innovation

Do investors generally prefer dividends or share repurchases? Support your answer.

If the yield curve is upward sloping: Hint: When there is an increase in the demand for an asset, the price of the asset goes up. You expect returns from investing in such ("higher-priced") asset to be lower in the future. Conversely, when there is a decrease in the demand for an asset, the price of the asset goes down. You expect returns from investing in such ("lower-priced") asset to be higher in the future. O investors expect the short-term interest rates to fall in the future. investors often shift their investment holdings away from long-term securities. investors often short sell short-term securities. investors often shift their investment holdings away from short-term securities.

Reverse engineering share prices is an exercise in deductive reasoning. If we assume market price reflects share value, then through reverse engineering we can infer what the market assumes about   a. the expected rate of return on equity capital, holding expected profitability and long-run growth constant.     b. the expected profitability, holding the expected rate of return on equity capital and long-run growth constant.     c. the expected long-run growth, holding the expected rate of return on equity capital and expected profitability constant.

АВС XYZ Discount rate (r) Historical growth rate of 0.015+2*0.085=0.185 0.015+1.5*0.085=0.142 (58/30)^(1/30)-1=0.022 Not available. Cannot dividends compute without dividends Sustainable growth rate Fundamental value using dividend growth model with the historical growth rate Fundamental value using the 467*(1+0.185)/(0.185-0.045) dividend growth model with =3953 the sustainable growth rate Fundamental value using residual income growth 0.15*(1-0.7)=0.045 467*(1+0.185)/(0.185-0.022) 0.2*(1-0)=0.2 Not available. Cannot =3395 compute without dividends Not available. Cannot compute without dividends 80*(1+0.022)-(550*0.022)/(0. 185-0.022)=427.36 Not available. Cannot compute without dividends model with the historical growth rate Fundamental value using the 80*(1+0.045)-(550*0.045)/(0. residual income growth 12*(1+0.2)-(100*0.2)/(0.142- 0.2)=96.5 185-0.045)=420.35 model with the sustainable growth rate

Which of the following statements is correct? With all else held constant, a firm will have a higher P/E if its market capitalization rate is higher.       P/E will tend to be higher when ROE is higher (assuming plowback is positive).   P/E will tend to be higher when the plowback rate is higher.