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6. The payments if it is made at the end of each period such as an end of the year is classified as
a. ordinary annuity
b. deferred annuity
c. annuity due
d. both a and b
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Answer: (d).both a and b

7. In the time value of money, the nominal rate is
a. not shown on timeline
b. shown on timeline
c. multiplied on timeline
d. divided on timeline
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Answer: (a).not shown on timeline

8. The value of net income is $124,500,000 and the common shares outstanding are 60,000,000 then earnings per share will be
a. 2.75
b. 0.481
c. 2.075
d. 2.8
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Answer: (c).2.075

9. The stockholders that do not get benefits even if the company's earnings grow are classified as
a. preferred stockholders
b. common stockholders
c. hybrid stockholders
d. debt holders
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Answer: (a).preferred stockholders

10. In the balance sheet, the sum of retained earnings and common stock are considered as
a. preferred equity
b. due equity
c. common perpetuity
d. common equity
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Answer: (d).common equity

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