Pre quiz Week 11

1. Undervalued stocks are better chosen in investing

a. True
b. False
2. Dividends will be paid to the majority shareholder first and then to the minority
a. True
b. False
3. Right is owned by the owner of the company's debt to buy additional shares below the current
share price
a. True
b. False
4. Interest rate, cash flow, and management affects the stock price
a. True
b. False
5. Capital gain and dividend are the benefits of invest in the stock market
a. True
b. False
6. The number of shares revolve in a company is
a. Outstanding share
b. Authorized share
c. Treasury share
d. Issued share
7. The following is included in the assumption of the efficient market hypothesis (EMH) is....
a. Investor thinks irrationally
b. Open information
c. Tax is included
d. There’s undervalue stock and overvalue stock
8. A step taken by a company or corporation to fragmented its shares into a larger number of
shares with a lower nominal value more proportionally
a. Warrant
b. Tender Offer
c. Right issue
d. Stock Split
9. The dividend valuation method is paid annually with the same amount and there is no increase
in dividend growth
a. Constant Growth Model
b. Gordon Growth Model
c. Zero Growth Model
d. Variable Growth Model
10. The evaluation technique used to value the company's stock is calculated by earning per share
and the ratio of the industry's price to income
a. Dividend valuation
b. PER approach
c. Book valuation
 d. Free cash flow valuation

Post quiz
1. Which one of the following types of securities has no priority in a bankruptcy proceeding?
a. Common stock
b. Straight bond
c. preferred stock
d. Convertible bond
2. Dividends are best defined as:
a. cash or stock payments to shareholders
b. cash payments to shareholders
c. cash payments to either bondholders or shareholders
d. cash or stock payments to either bondholders or shareholders
3. Which one of the following will increase the current value of a stock?
a. Increase in the capital gains yield
b. Increase in the required return
c. Increase in the market rate of return
d. Decrease in the dividend growth rate
4. PT Bank Central Asia Tbk (BBCA) plans to split the nominal value of the shares or stock split
with a ratio of 1:5. How many lots of shares do you have if you have 5 lots of shares?
a. 1
b. 25
c. 10
d. 2500
5. Statement transferring the votes of a stockholder to another party
a. Proxy statement
b. Issued statement
c. Initial statement
d. Primary statement
6. Nonvoting common stock is issued when?
a. the firm wishes to raise capital through the sale of common stock but does not want to
give up its voting control.
b. the firm wishes to raise capital through the sale of common stock and want to give up its
voting control.
c. the firm wishes to lessening capital through the sale of common stock but does not want to
give up its voting control.
d. the firm wishes to lessening capital through the sale of common stock and want to give up
its voting control.
7. A preferred stock issue generally includes a number of features, EXCEPT
a. Cumulative
b. Non-cumulative
c. Callable
d. Non-Callable
8. Book value per share is simply the amount per share of common stock that would be received if all
the firm’s assets were sold for their exact book (accounting) value TRUE
9. price/earnings multiple approach used to estimate the firm’s share value; it is calculated by
multiplying the firm’s expected earnings per share (EPS) by the average price/earnings (P/E) ratio for
the industry TRUE
10. The common stock of a firm can be privately owned by private investors or publicly owned by public
investors. TRUE