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Commerce and BusinessbackBusinessbackCorporate Finance/Financial ManagementbackFundamentals of Corporate FinancebackPractice Set 2491back

Stock Valuation

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Question 1
Free
Multiple Choice

What is the model called that determines the present value of a stock based on its next annual dividend,the dividend growth rate,and the applicable discount rate?

Choose correct answer/s
A

zero growth

B

dividend growth

C

capital pricing

D

earnings capitalization

E

discounted dividend

Check answer
Question 2
Free
Multiple Choice

Which one of the following is computed by dividing next year's annual dividend by the current stock price?

Choose correct answer/s
A

yield to maturity

B

total yield

C

dividend yield

D

capital gains yield

E

growth rate

Check answer
Question 3
Free
Multiple Choice

Which one of following is the rate at which a stock's price is expected to appreciate?

Choose correct answer/s
A

current yield

B

total return

C

dividend yield

D

capital gains yield

E

coupon rate

Check answer
Question 4
Free
Multiple Choice

Which one of the following types of stock is defined by the fact that it receives no preferential treatment in respect to either dividends or bankruptcy proceedings?

Choose correct answer/s
A

dual class

B

cumulative

C

non-cumulative

D

preferred

E

common

Check answer
Question 5
Free
Multiple Choice

A company has two open seats,Seat A and Seat B,on its board of directors.There are 6 candidates vying for these 2 positions.There will be a single election to determine the winner of both open seats.As the owner of 100 shares of stock,you will receive one vote per share for each open seat.You decide to cast all 200 of your votes for a single candidate.What is this type of voting called?

Choose correct answer/s
A

democratic

B

cumulative

C

straight

D

deferred

E

proxy

Check answer
Question 6
Multiple Choice

You want to be on the board of directors of Wisely Foods.Since you are the only shareholder that will vote for you,you will need to own more than half of the outstanding shares of stock if you are to be elected to the board.What is the type of voting called that requires this level of stock ownership to be successfully elected under these conditions?

Choose correct answer/s
A
democratic
B
cumulative
C
straight
D
deferred
E
proxy
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Question 7
Multiple Choice

You cannot attend the shareholder's meeting for Alpha United so you authorize another shareholder to vote on your behalf.What is the granting of this authority called?

Choose correct answer/s
A
altering
B
cumulative voting
C
straight voting
D
indenture agreement
E
voting by proxy
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Question 8
Multiple Choice

What are the distributions to shareholders by a corporation called?

Choose correct answer/s
A
retained earnings
B
net income
C
dividends
D
capital payments
E
diluted profits
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Question 9
Multiple Choice

Which one of the following is a type of equity security that has a fixed dividend and a priority status over other equity securities?

Choose correct answer/s
A
senior bond
B
debenture
C
warrant
D
common stock
E
preferred stock
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Question 10
Multiple Choice

Callander Enterprises stock is listed on NASDAQ.The firm is planning to issue some new equity shares for sale to the general public.This sale will occur in which one of the following markets?

Choose correct answer/s
A
private
B
auction
C
exchange floor
D
secondary
E
primary
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Question 11
Multiple Choice

The secondary market is best defined by which one of the following?

Choose correct answer/s
A
market in which subordinated shares are issued and resold
B
market conducted solely by brokers
C
market dominated by dealers
D
market where outstanding shares of stock are resold
E
market where warrants are offered and sold
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Question 12
Multiple Choice

An agent who maintains an inventory from which he or she buys and sells securities is called a:

Choose correct answer/s
A
broker.
B
trader.
C
capitalist.
D
principal.
E
dealer.
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Question 13
Multiple Choice

An agent who arranges a transaction between a buyer and a seller of equity securities is called a:

Choose correct answer/s
A
broker.
B
floor trader.
C
capitalist.
D
principal.
E
dealer.
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Question 14
Multiple Choice

The owner of one of the 1,366 trading licenses for the NYSE is called a:

Choose correct answer/s
A
broker.
B
member.
C
agent.
D
specialist.
E
dealer.
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Question 15
Multiple Choice

The person on the floor of the NYSE who executes buy and sell orders on behalf of customers is called a(n):

Choose correct answer/s
A
floor trader.
B
dealer.
C
specialist.
D
executor.
E
commission broker.
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Question 16
Multiple Choice

A market maker who acts as a dealer in one or more securities on the floor of the NYSE is called a:

Choose correct answer/s
A
floor trader.
B
floor post.
C
specialist.
D
floor broker.
E
commission broker.
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Question 17
Multiple Choice

A floor broker on the NYSE does which one of the following?

Choose correct answer/s
A
supervises the commission brokers for a financial firm
B
trades for his or her personal inventory
C
executes orders on behalf of a commission broker
D
maintains an inventory and takes the role of a specialist
E
is charged with maintaining a liquid, orderly market
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Question 18
Multiple Choice

An individual on the floor of the NYSE who owns a trading license and buys and sells for his or her personal account is called a:

Choose correct answer/s
A
floor trader.
B
exchange customer.
C
specialist.
D
floor broker.
E
market maker.
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Question 19
Multiple Choice

Which one of the following is the electronic system used by the NYSE for directly transmitting orders to specialists?

Choose correct answer/s
A
OTCDOT
B
SuperDOT
C
Instinet
D
Internet
E
Floornet
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Question 20
Multiple Choice

The stream of customer orders coming in to the NYSE trading floor is called the:

Choose correct answer/s
A
paper trail.
B
trading volume.
C
order flow.
D
bid-ask spread.
E
commission trail.
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