• 2022-05-26
    If the intrinsic value of a share of common stock is less than its market value, which of the following is the most reasonable conclusion?
    A: The stock has a low level of risk.
    B: The stock offers a high dividend payout ratio.
    C: The market is undervaluing the stock.
    D: The market is overvaluing the stock.
  • D

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    • 0

      A corporation issued 6,000 shares of its $1 par value ordinary stock in exchange for land that has a market value of $84,000. The entry to record this transaction would include: A: A debit to Ordinary Stock for $6,000. B: A debit to Land for $6,000. C: A credit to Land for $84,000. D: A credit to Share Premium, Ordinary Stock for $78,000.

    • 1

      Suppose that the market price of Company X is $45 per share and that Company Y is $30. If X offers three-fourths a share of common stock for each share of Y, the ratio of exchange of market prices would be:

    • 2

      Which of the following statements is most accurate regarding a firm’s cost of preferred shares A firm’s cost of preferred stock is:() A: the market price of the preferred shares as a percentage of its issuance price. B: the dividend yield on the firm’s newly-issued preferred stock. C: approximately equal to the market price of the firm’s debt as a percentage of the market price of its common shares.

    • 3

      The stock market reached a ____ high on August 21.

    • 4

      A continuous market most likely exists for a stock when:() A: an overnight buildup of buy and sell orders for the stock occurs. B: new information about the company is continuously released to market participants. C: numerous dealers are willing to make a market in the stock at any time that the market is open.