Question

Of the following factors influenced by managers that affect stock price, which one is incorrect? a....

Of the following factors influenced by managers that affect stock price, which one is incorrect?

a. Dividend policy

b. Projected cash flows, as well as any associated risk

c. Timing of cash flow streams

d. Executive compensation

e. Use of debt or capital structure

Homework Answers

Answer #1

Answer is c) Timing of cash flow streams

Dividend policy affects the stock price based on Dividend yield. Executive compensation does have a bearing on affecting the stock price. A company led well by executives will see its price going up. Projected cash follow affect the profitability and hence have a bearing on share price. Use of debt or capital structure affects the share price based on the proportion of usage and its financial leverage impact on Earnings per share

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following would least affect the value of a firm’s stock?        A. amount of cash...
Which of the following would least affect the value of a firm’s stock?        A. amount of cash flows   B. exchange where stock is trades C. timing of cash flows                                            D. risk associated with receiving cash flows
The market price of a company’s shares is established by a number of factors. Which one...
The market price of a company’s shares is established by a number of factors. Which one of the following is not one of those factors? a. an assessment by purchasers of the risk of equality ownership b. the company’s earnings per share c. the company’s dividend payments policy d. the company’s ratio of net income to debt
The market price of a company’s shares is established by a number of factors. Which one...
The market price of a company’s shares is established by a number of factors. Which one of the following is not one of those factors? a. an assessment by purchasers of the risk of equality ownership b. the company’s earnings per share c. the company’s dividend payments policy d. the company’s ratio of net income to debt
Which of the following is false? A. For a constant dividend growth stock, the stock price...
Which of the following is false? A. For a constant dividend growth stock, the stock price is expected to grow at a rate equal to the dividend growth rate. B. For the constant dividend growth model, the required return must be larger than the constant dividend growth rate. C. As with bonds, the current price of a stock is the future value of all expected cash flows. D. Financial managers attempt to maximize the value of the firm by increasing...
1. Which of the following are ways that a firm can reduce cash flows in order...
1. Which of the following are ways that a firm can reduce cash flows in order to prevent managers from wastefully spending excess cash flows? Check all that apply. A) Funneling excess cash flows back to shareholders through higher dividends B) Minimizing the amount of debt in the firm’s capital structure so that the firm can borrow money at a reasonable rate when good investment opportunities arise C) Funneling excess cash flows back to shareholders through stock repurchases D) Increasing...
Citric's managers believe that it will have the following free cash flows. If the weighted average...
Citric's managers believe that it will have the following free cash flows. If the weighted average cost of capital is 14% and the free cash flows are expected to continue growing at the same rate after Year 3 as from Year 2 to Year 3. If there is $200 million in debt, $30 million in preferred stock, and 10 million shares outstanding, what is your estimate of stock price? Year 1 2 3 Free cash flow -$20.00 $48.00 $50.50 ​...
In addition to the five factors, dividends also affect the price of an option. The Black–Scholes...
In addition to the five factors, dividends also affect the price of an option. The Black–Scholes Option Pricing Model with dividends is:    C=S×e−dt×N(d1)−E×e−Rt×N(d2)C=S×e−dt×N(d1)⁢−E×e−Rt×N(d2) d1=[ln(S/E)+(R−d+σ2/2)×t](σ−t√)d1= [ln(S⁢  /E⁢ ) +(R⁢−d+σ2/2)×t ] (σ−t)  d2=d1−σ×t√d2=d1−σ×t    All of the variables are the same as the Black–Scholes model without dividends except for the variable d, which is the continuously compounded dividend yield on the stock.    A stock is currently priced at $88 per share, the standard deviation of its return is 44 percent...
1. Which of the following statements is incorrect? a. The time value of money implies that...
1. Which of the following statements is incorrect? a. The time value of money implies that a dollar received today is worth more than a dollar received tomorrow. b. The time value of money implies that the further in the future you receive a dollar, the more it is worth today. c. All the answers are correct except one. d. A dollar today is worth more than a dollar received in the future. e. The earnings from compounding drive much...
Which of the following statements may NOT be TRUE? Select one: a. It is inappropriate to...
Which of the following statements may NOT be TRUE? Select one: a. It is inappropriate to discount the cash flows of levered equity at the same discount rate that we use for unlevered equity. b. Under current market condition, Modigliani and Miller argued that the total value of a firm should not depend on its capital structure. c. Leverage increases the risk of the equity of a firm. d. Because the cash flows of the debt and equity sum to...
Which of the following statements is incorrect regarding the constant growth model? a.Another name for the...
Which of the following statements is incorrect regarding the constant growth model? a.Another name for the dividend to be received in one year divided by the current stock price is the expected dividend yield. b.The constant growth model assumes that earnings, dividends and stock prices are expected to grow at a constant rate. c.If the dividend growth rate is zero, the constant growth model becomes a zero-growth valuation model. d.The constant growth model can still be used if the required...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT