eCourses PRAIRIE VIEW A+M HELP ENGLISH -UNITED STATES (EN US)- O c. bond\'s yiel
ID: 2794229 • Letter: E
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eCourses PRAIRIE VIEW A+M HELP ENGLISH -UNITED STATES (EN US)- O c. bond's yield to maturity Question 21 Not yet As discount rate increases, the present value of a given sum of money to be recelved at a future date Select one Points out of aincreases question O b decreases O c. stays the same- no change Question 22 Not yet which of the following terms best describes an annuity due? Select one: O a a perpetuity Points out of 1 b unequal payments c. equal payment at beginning of year d equal payment at the end of the year O O Question 23 A common stock gives its shareholders the right to have dividend from the stock Not yet Select one O True O False Points out ot 1 Question 24 Not ye ns wered Points out of 1 Preferred stock guarantees fixed dividend to its owners Select one O True False Queston 25Explanation / Answer
21) As discount rate increases, the present value of a given sum of money to be received at a future date -
Answer - b. decreases
Explanation - The present value of the given sum of money to be received at a future date decreases as the future cash flows are discounted at a given discount rate, as the discount rate increases the present value of future cashflows decreases.
22) Which of the following terms best describes an annuity due?
Answer - c. equal payment at the beginning of the year
Explanation - Annuity due is the recurring equal payment made at the beginning of the year.
23) A common stock gives its shareholders the right to have dividend from the stock.
Answer - False
Explanation - A common stockholders receive dividend from the stock only after dividend payment is made to preferred stockholders.
24) Prefered stock guarantees fixed dividend to its owners.
Answer - True
Explanation - The stockholders/owners who have preferred stock have higher claim on assets and earnings of the company as compared to other stockholders/owners. They are paid fixed dividends and but have no voting rights.
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