Quiz 4
A zero coupon bond is a bond that
will sell for a premium
is a premium value bond
has a high current yield
originally sold at a discount
The common stock of Kyocera currently sells for $88.50 and its current dividend is
$1.10. Determine the implied growth rate for Kyoc...
Quiz 4
A zero coupon bond is a bond that
will sell for a premium
is a premium value bond
has a high current yield
originally sold at a discount
The common stock of Kyocera currently sells for $88.50 and its current dividend is
$1.10. Determine the implied growth rate for Kyocera assuming that an investor’s
required rate of return is 14% and that earnings and dividends are expected to grow
at a constant rate.
12.3%
13.9%
13.8%
12.6%
Normally the coupon rates on new bonds
are set just over the prevailing prime rate
are set equal to the market rate plus an inflation premium
do no change over the life of the issue
float with changes in the prime rate
One of the assumptions of the constant growth dividend valuation model is that
the required rate of return increases at a constant rate
the investor’s required rate of return is equal to the expected dividend yield
the dividend rate (in dollars) will remain constant
the required rate of return is greater than the dividend growth rate
The call feature is an advantage to the issuing firm
if the bond has a low par value
if interest rates decline
if interest rates increase
if the bond has a floating rate
Fast Wheels Inc expects to pay an annual dividend of $0.72 next year. Dividends
have been growing at a compound annual rate of 6 percent and are expected to
continue growing at that rate. What is the value of a share of stock of Fast Wheels
to an investor who requires a 14 percent rate of return?
$9.54
$5.14
$9.00
$8.16
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