Question1: Pluto's is offering a preferred stock for sale. This stock will pay an annual dividend of $6. If your required return is 6 percent, how much are you willing to pay for one share of this stock ?
[A] $70.50
[B] $74.73
[C] $100.00
[D] $62.74
[E] $66.51
Question2: Preferred stock:
[A] Pays a guaranteed dividend
[B] Has a higher claim in liquidation than the common stock.
[C] Is a form of debt from a tax point of view.
[D] Is always granted voting rights.
[E] Is a form of debt from legal perspective.
Question3: The type of security which represents ownership in a firm without priority for dividends or priority in a bankruptcy is called stock.
[A] Common
[B] Preferred
[C] Treasury
[D] Convertibles
[E] Senior