Question

21. The price a dealer is willing to pay for a security held by an investor...

21.

The price a dealer is willing to pay for a security held by an investor is called the:

A)

Equilibrium price.

B)

Ask price.

C)

Bid price.

D)

Bid-ask spread.

E)

Auction price.

22.

Suppose you own 500 shares of Biogen common stock. Four directors are to be elected. Since the firm uses cumulative voting, you can cast as many as ___________ votes for a single director.

A)

125

B)

250

C)

500

D)

1,000

E)

2,000

23.

What would you pay today for a stock that is expected to make a $2 dividend next year if the expected dividend growth rate is 5% and you require a 12% return on your investment?

A)

$28.57

B)

$29.33

C)

$31.43

D)

$43.14

E)

$54.30

24.

Suppose MOTA Inc. has just issued a dividend of $3.25 per share. Subsequent dividends will remain at $3.25 indefinitely. Assuming a 10% required rate, what is the value of one share?

A)

$22.50

B)

$27.25

C)

$32.50

D)

$37.25

E)

$39.75

25. IEM announced that it will pay a $0.50 dividend per share to holders of record as of Tuesday, May12, 2020. Holding all else constant, the stock price will be lower by $0.50 per share at the opening of trading on

A) May 8, 2020

B) May 9, 2020.

                 C)   May 10, 2020.

           D)   May 11, 2020

           E)   May 12, 2020

Homework Answers

Answer #1

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Answer:

21

The price a dealer is willing to pay for a security held by an investor is called the Bid price

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