Exam 8: Common Stock: Characteristics, Valuation, and Issuance

An option for selling securities reserved for larger firms (MVE > $150,000,000) whereby the firm files a master registration statement and then can sell small increments of the stock over the next two years by filing a short-form statement is called _____.

Quantum Inc. has 5.4 million shares outstanding, and the firm's charter provides for cumulative voting. The company has a twelve-member board of directors, all of whom are up for reelection. What is the minimum number of shares needed to ensure the election of one director?

During negotiated underwriting, in whose interest is it that the issued security be fairly priced?

What is the current value of a share of MoreGro common stock that does not pay a current dividend? Earnings are growing at a 20 percent per year rate for the next 10 years. Assume the investor has a required rate of return of 15 percent and expects to sell the security in 5 years. Current earnings are $1.50 per share.

In the constant growth dividend valuation model, the required rate of return on a common stock can be shown to be equal to the sum of the dividend yield plus ____.

In the constant growth dividend valuation model, the required rate of return must be ____ the dividend growth rate in order for the formula price to be meaningful.

Which of the following are reasons a large multinational corporation might sell equity in international markets rather than selling stock only in the country in which they are domiciled?

Common stockholders have a number of general rights, including all of the following EXCEPT ____:

The most important factor to be considered in the valuation of a closely held firm is _____.

One of the assumptions of the constant growth dividend valuation model is that the _____.

When a stock is split 2 for 1, then the ____ figure on the firm's balance sheet is cut in half.

AVIX has 6.8 million shares outstanding and the firm's charter provides for a majority voting procedure. The company has seven directors up for reelection. What is the minimum number of shares needed to ensure the election of one director?

What is the value of a share of stock of HOV Inc. to an investor who requires a 12 percent rate of return if HOV's current dividend is $1.20? Assume earnings and dividends are expected to grow at a compound annual rate of 7 percent.

Helix common stock currently sells for $30, and its current dividend is $1.50. If the required rate of return on Helix stock is 15%, what is the implied growth rate of its earnings and dividends?

All of the following are ways that securities are offered to the public in a public offering EXCEPT _____.

In the constant growth dividend valuation model, the required rate of return on a common stock is equal to the sum of the ____.

HiGlo's common stock sells for $23.50, and its earnings are expected to grow at a rate of 12% annually. What is the current dividend (D_o) for an investor who requires a 15% return?

In a reverse stock split, ____.

The returns investors receive from holding common stocks may be in two forms. They are ____.

Assume Zero-Sum Enterprise pays an annual dividend of $1.40 per share and that neither earnings nor dividends are expected to grow in the future. What is the value of Zero-Sum's stock to an investor who requires a 14 percent rate of return?