QUESTION 3 Which of the following types of stocks pay its investors a fixed amou

Question

QUESTION 3 Which of the following types of stocks pay its investors a fixed amount of dividends? a. Preemptive stocks b. Common stocks Oc. Growth stocks O d. Founders' shares O e. Preferred stocks QUESTION 4 Which of the following statements is true of a project whose cash flows accrue relatively rapidly? a. The net present value of the project is always negative if cash flows accrue rapidly O b. The net present value is not very sensitive to changes in the discount rate. Oc. The payback period is longer than the years expected to recover the original investment O d. The required rate of return is revised throughout the duration of the project. Oe. The project will have multiple internal rates of return due to rapidly accruing cash flows QUESTION 5 For an investment in a stock, the probability of the return being 10.0% is 0.3 10.0% 1s 04, and 30.0% is 0.3 Given he probability distributions, what is the expected rate of return for the investment? a. 9.5% b. 10.0% Oc 15.0% Od. 13.0% Oe. 12.5%

Explanation / Answer

3.

Preferred stocks are stocks issued with a specified fixed rate of dividends and a fixed maturity period. The preferred stockholders, receive dividends at a fixed rate each year.

Therefore, the correct answer is e. Preferred stock

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