Financial Markets Assignment

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Financial Markets Assignment

34. If financial markets were efficient (close to the perfect competition market), at equilibrium: a) The fundamental value of a stock in this market would equal the present value of its future dividends b) The price of a financial asset would equal its present value c) The NPV of an investment in financial assets would equal 0 d) All of the above 35. If financial markets were efficient (close to the perfect competition market). At equilibrium, a investor buying a stock should expect: a) A Null Net Present Value from the investment. b) A Null return from the investment. c) A return from the investment lower than the opportunity cost of capital. d) All of the above 36. AS Inc. has an issue of preferred stock outstanding that

34. If financial markets were efficient (close to the perfect competition market), at equilibrium:
a) The fundamental value of a stock in this market would equal the present value of its future dividends
b) The price of a financial asset would equal its present value
c) The NPV of an investment in financial assets would equal 0
d) All of the above
35. If financial markets were efficient (close to the perfect competition market). At equilibrium, a investor buying a stock should expect:
a) A Null Net Present Value from the investment.
b) A Null return from the investment.
c) A return from the investment lower than the opportunity cost of capital.
d) All of the above
36. AS Inc. has an issue of preferred stock outstanding that pays $3 dividend every year, in perpetuity If this issue currently sells for $50 per share and financial markets are efficient. At equilibrium:
a) Its expected return is R =D/Po $3/$50
b) The stock can be valued in the long term by discounting its dividends
c) The value of the stock is $50.
d) All of the above. to maintain a constant 5 per cent growth rate
37. BETA Inc. just paid a dividend of $2.5 and pledges in dividends forever. If the required return on the stock is 13% and financial markets are efficient. At equilibrium, the current share price is:
a) Po 2.5 (1+0.05)/0.13
b) Po 2.5 (1+0.05)/(1+0.13)
c) Po 2.5 (1+0.05)/(0.13-0.05)
d) Po 2.5/(0.13-0.05) Get Finance homework help today