Question

In: Finance

Enter “T” or “F” in the column to the right A stock with a dividend of...

Enter “T” or “F” in the column to the right

  1. A stock with a dividend of $5 must have a higher price than a stock that pays a dividend of $1.
  1. The value of a stock is the present value of all future cash flows from the stock.
  1. You should buy a stock that has a calculated value of $20 and is priced at $18.
  1. One difference between stocks and bonds is that stocks mature, but bonds do not.
  1. One difference between stocks and bonds is that a bond’s cash flows are known and promised, but a company does not have to pay dividends.
  1. Walmart stock is likely to have a higher P/E ratio than Amazon stock.
  1. The dividend growth rate can never be negative.
  1. Stocks are generally more risky than bonds.
  1. According to the constant growth model, the dividend yield is the same as the capital gains yield.
  1. Systematic risk can not be reduced or eliminated through diversification.
  1. You short stocks when you think the price is currently too low.
  1. 1Y Target price estimates are the average of analyst estimates.

Solutions

Expert Solution

  1. A stock with a dividend of $5 must have a higher price than a stock that pays a dividend of $1. - True
  1. The value of a stock is the present value of all future cash flows from the stock - True
  1. You should buy a stock that has a calculated value of $20 and is priced at $18. - True
  1. Onedifference between stocks and bonds is that stocks mature, but bonds do not. Fasle
  1. One difference between stocks and bonds is that a bond’s cash flows are known and promised, but a company does not have to pay dividends. - True
  1. Walmart stock is likely to have a higher P/E ratio than Amazon stock. - True
  1. The dividend growth rate can never be negative. - False
  1. Stocks are generally more risky than bonds - True
  1. According to the constant growth model, the dividend yield is the same as the capital gains yield - False
  1. Systematic risk can not be reduced or eliminated through diversification. - True
  1. You short stocks when you think the price is currently too low. - False
  1. 1Y Target price estimates are the average of analyst estimates - True

jeff jeffy answered 2 years ago
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