Chapter 7 Finance Hw

Stock price reporting has increasingly moved from traditional print media to the ______ in recent years.

internet

Electronic communication networks increase ________ and _________ in a market.

liquidity, competition

When voting for the board of directors, the number of votes a shareholder is entitled to is generally determined as follows:

one vote per share held

Institutional memory can be enhanced by

staggering board elections

True or false: Total return is calculated by adding the dividend yield and the capital gains yield.

true

The trading of existing shares occurs in the ______ market.

secondary

New York Stock Exchange Designated Market Makers (DMMs) were formerly called ______

specialists

Which type of voting procedure provides "institutional memory"?

staggered

What right does a proxy give to a shareholder?

the right to vote on behalf of another shareholder

If you hold 50 shares of a particular corporation's common stock and there are 5 directors to be elected, how many votes will you be allowed to cast under cumulative voting?

250

Which of the following defines the primary market?

The primary market is where stocks are issued for the first time.

______ refers to the stream of customer orders to buy and sell stocks.

order flow

Shares of stock are first brought to the market and sold to investors in the ______ market.

primary

If there are nine directors that need to be elected, how many shares do you need to own in order to guarantee a seat on the board under straight voting?

50 percent of the stock + 1 share

Someone who maintains an inventory of stocks and buys and sells those stocks is known as a _____

dealer

ayments to shareholders that represent a return on the capital contributed to the corporation are referred to as _____

dividends

True or false: All classes of stock issued by a firm must have equal voting rights.

false

Which of the following statements are true of cumulative preferred dividends? (Select all that apply.)

- They are carried forward as an arrearage. - Preferred shareholders receive no interest on the cumulated dividends.

Which of the following is true of classes of common stock?

-The classes of common stock often have unequal voting rights. -A primary reason for creating more than one class of stock is to maintain control.

Which of the following are true of dividends?

-They are paid at the discretion of the board of directors. -They are taxable to individual shareholders.

The NYSE differs from the Nasdaq primarily because the NYSE has ______.

-a face-to-face auction market -a physical location

If there are nine directors to be elected, what is the least number of shares you will need to guarantee a seat on the board under cumulative voting?

10 percent of the stock plus 1 share

What beneficial purpose does staggering serve?

It provides institutional memory.

The two most important stock markets in the United States are the New York Stock Exchange and ______.

Nasdaq

A website that allows investors to trade directly with one another is called ______.

an ECN

A person who brings buyers and sellers together is called a(n) ______.

broker

When directors elected by common shareholders defer preferred dividends indefinitely, ________

common shareholders must also forego dividends

The fundamental business of the New York Stock Exchange is to attract ______.

order flow

the business of the NYSE is to attract and process _____.

order flow

under a ____ voting mechanism, the minimum number of votes required to acquire a seat on a board is ____ % PLUS ____,

straight, 50, 1

If unpaid preferred dividends must be "caught up" before any common dividends can be paid, they are called _____ dividends

cumulative

If unpaid preferred dividends must be "caught up" before any common dividends can be paid, they are called _____ dividends.

cumulative

"Inside quotes" represent the ______ and the ______.

highest bid price; lowest ask price

A written authorization for one shareholder to vote the stock of another shareholder is called a(n)

proxy

Nasdaq has which of these features?

-computer network of securities dealers -multiple market maker system

Preferred stock has preference over common stock in the:

-distribution of corporate assets. -payment of dividends.

Initial public offerings of stock occur in the _____ market.

primary