The constant growth model of equity valuation assumes that _____________.
A). the dividends paid by the company remain constant
B). the dividends paid by the company grow at a constant rate of growth
C). the cost of equity may be less than or equal to the growth rate
D). the growth rate is less than the cost of equity.
Net working capital refers to.
A). total assets minus fixed assets
B). current assets minus current liabilities
C). current assets minus inventories
D). current assets.
If an investor is attempting to buy a stock that is very volatile, it would be best to use___________.
A). market order
B). limit order
C). stop-loss order
D). contingency order.
The cost of capital of a firm is ______________.
A). The dividend paid on the equity capital
B). The weighted average of the cost of various long-term and short-term sources of finance
C). The average rate of return it must earn on its investments to satisfy the various investors
D). The minimum rate of return it must earn on its investments to keep its investors satisfied
Ownership securities are represented by _______.
A). stock
B). loan
C). debt
D). debentures