Financing a business with common stock is less risky than financing it with bonds
Indicate whether the statement is true or false
T
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You are working at a tax office that completes personal tax returns for a fee. Your boss asks you to estimate how much your entire office will collect in fees for the coming year. What will you create for your boss?
a. fee budget b. revenue budget c. expense budget d. capital expenditures budget
Indicate the group of words or sentence with correct capitalization. Which is correct?
A) The Prime Minister phoned him personally. B) The prime minister phoned him personally.
Lynne agrees to buy Harriette's farm for $200,000 and puts $20,000 down. Then Lynne learns she is allergic to hay and repudiates the contract. If Harriette can sell the farm in a good faith transaction for $190,000 a month later, she may:
a. keep Lynne's $20,000. b. keep $10,000 of Lynne's down payment. c. not keep any of the down payment money. d. sue for specific performance.
Church Inc. is presently enjoying relatively high growth because of a surge in the demand for its new product. Management expects earnings and dividends to grow at a rate of 22% for the next 4 years, after which competition will probably reduce the growth rate in earnings and dividends to zero, i.e., g = 0. The company's last dividend, D0, was $1.25, its beta is 1.20, the market risk premium is 5.50%, and the risk-free rate is 3.00%. What is the current price of the common stock? Do not round intermediate calculations.
A. $26.57 B. $32.69 C. $28.97 D. $23.39 E. $27.37