Exam 11: Investing Basics and Evaluating Bonds

The federal government requires corporations selling new issues of securities to disclose information about corporate earnings,assets and liabilities,products or services,and the qualifications of top management in a prospectus.

Equity financing is a popular choice to provide long-term financing for a corporation because

Typically,growth companies pay out ____________ of their earnings in dividends to their stockholders.

Assume the beta for the stock market in general is 1.0 and that the beta for World-Wide Television Productions is 2.4.Which of these statements is not true?

When investors are optimistic about the overall economy and buy stocks,it is known as a(n)____________ market.

The right of current stockholders to purchase any new stock that the corporation issues before it is offered to the general public is called a ____________ right.

The price earnings ratio is a corporation's after-tax earnings divided by the corporation's earnings per share of stock outstanding over the last 12 months.

Which of the following statements is not true?

A public corporation is a corporation whose stock is owned by relatively few people and is not traded openly in the stock market.

Capital gains yield is the stock's appreciation in value divided by its end-of-year stock price.

Joanne Blower owns 200 shares of Corel Corporation stock.She purchased the stock for $22 a share.She sold her stock for $28 a share.The commissions required to buy and sell her stock totaled $180.Assuming that she received no dividends during the time she owned the stock,what is her total profit from this transaction?

If an investor owns participating preferred stock,missed or omitted dividends accumulate and must be paid before any cash dividend is paid to common stockholders.

Kate Babini owns 250 shares of Gildan Activewear.Suppose that for the last calendar quarter,Gildan paid $0.28 a share.What is the total amount she received in her dividend cheque for this quarter?

A call option gives the owner the right to sell 100 shares of a stock at a guaranteed price before a definite expiration date.

Which of the following is not a true statement?

A defensive stock is a stock that typically sells for less than $l.

A stock that is issued by a corporation that has a large amount of capitalization is called a(n)____________ stock.

A long-term investment technique used by investors to purchase stock without paying a commission to a broker is called

Which of the following is a long-term stock investment technique?

Preferred stocks are often referred to as "middle" investments.