Sophia Principle of Finance Milestone Test_Combined

You passed this Milestone 18 questions were answered correctly. 2 questions were answered incorrectly. 1 You would like to have $30,000 in an account after five years' time. If the account earns 3% compounded interest yearly, how much would you have to deposit today?  $29,126  $28,092  $25,878  $26,087 CONCEPT Present Value, Single Cash Flows 2 Select the pairing that is correctly matched.  Common stock: the issuer must honor any missed dividend payments  Preferred stock: stockholder receives interest from the issuer  Common stock: the value of the stock is dependant upon the overall value of the company  Preferred stock: cannot be converted for common stock shares CONCEPT Rules and Rights of Common and Preferred Stock 3 Select one advantage of an annuity for a borrower.  The sum of all the payments will be less than the original loan amount.  The payment amount may go down if interest rates fall.  It can be easier to make regular payments rather than a single lump sum.  Annuities do not charge interest. CONCEPT Annuities 4 Select the statement that is true of common stock.  Companies issue dividends to common stockholders before preferred stockholders.  Common stockholders do not have a right of first refusal when new stock is issued.  Common stock has a stronger claim to a company's assets than preferred stock.  Despite having fewer financial protections, common stock typically outperforms preferred stock. CONCEPT Types of Stock 5 Determine the value of a stock with the following variables