Which of the following statements is correct? a. Unlike bondholders and other cr

Question

Which of the following statements is correct? a. Unlike bondholders and other credit holders. holders of equity capital are owners of the firm. b. common equity holders have voting rights that permit them to elect the firm's board of directors. C. Bondholders and preferred stockholders receive no voting rights. d. All of the above statements are correct. Which of the following statements is not correct? The par value of a common stock is generally low ($1) and is a relatively useless value established in the firm's corporate charter. b. In a rights offering, the firm grants rights to its existing shareholders, which permits them to purchase additional shares at a price below the current price. e. Issued shares are the number of shares that have been put into circulation and includes outstanding shares but does not include treasury stock. J. Authorized shares are the number of shares of common stock that a firm's corporate charter allows. Which of the following statements regarding the Constant Growth Model of stock valuation po= D1/R- g), is correct? a. It cannot be used for firms which have negative growth rates. b. The required rate of return must be smaller than the growth rate. g is usually about 20%. Statements a and c are correct. All of the above statements are incorrect.

Explanation / Answer

1.(d),2.(c), 3.(b)

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