29) All of the following features may be characteristic of preferred stock EXCEPT

callable.

(A

(B

no maturity date.

tax-deductible dividends.

convertible.
Answer: c

(C

(D

(D
If a firm one of the classes is probably non-voting stock.
has class
D
A and
class B
common
stock
outstandi
ng, it
means
that
A
(

each
class
receives
a
different
dividend
.
B
(

the par
value of
each
class is
different.
C
(

the
dividend
paid to
one of
the
classes is
tax
deductib
le by the
corporati
on.

33)

nt.

$28.57
Julian is
consideri
ng
purchasi
ng the
stock of
Pepsi
Cola
because
he really
loves the
taste of
Pepsi.
What
should
Julian be
willing
to pay
for Pepsi
today if
it is
expected
to pay a
$2
dividend
in one
year and
he
expects
dividend
s to
growth
at 5
percent
indefinit
ely?
Julian
requires
a 12
percent
return to
make
this
investme

$29.33

$31.43

$43.14
A

(A

(B

(C

(D

$25.33

$18.73
Nico
Custom $29.86
Cycles'
common
$20.72
stock
currently
pays no
dividend
s. The
company
plans to
begin
paying
dividend
s
beginnin
g 3 years
from
today.
The first
dividend
will be
$3.00 and
dividend
s will
grow at 5
percent
per year
thereafte
r. Given
a
required
return of
15
percent,
what
would
you pay
for the
stock
today?
A
(

(B

(C

(D

if her required return is 10.5%?

$54.90

$60.80

Jia's
$66.60
Fashions
recently
paid a $2 $69.30
annual
dividend C
. The
company
is
projectin
g that its
dividend
s will
grow by
20
percent
next
year, 12
percent
annually
for the
two
years
after
that, and
then at 6
percent
annually
thereafte
r. Based
on this
informati
on, how
much
should
Jia's
Fashions
common
stock sell
for today

(A

(B

(C

(D