Finance Chapter 8

A company has four open seats on its board of directors. There are seven candidates vying for these four positions. There will be a single election to determine the winners. As the owner of 100 shares of stock, you will receive one vote per share for each open seat. You decide to cast all 400 of your votes for a single candidate. What is this type of voting called? Multiple Choice Democratic Cumulative Straight Deferred Proxy

Cumulative

What are the distributions of either cash or stock to shareholders by a corporation called? Multiple Choice Coupon payments Retained earnings Dividends Capital payments Diluted profits

Dividends

Ernst & Frank stock is listed on NASDAQ. The firm is planning to issue some new equity shares for sale to the general public. This sale will definitely occur in which one of the following markets? Multiple Choice Private Auction Tertiary Secondary Primary

Primary

An agent who maintains an inventory from which he or she buys and sells securities is called a: Multiple Choice broker. trader. capitalist. principal. dealer.

dealer

The annual dividend yield is computed by dividing _____ annual dividend by the current stock price. Multiple Choice this year's last year's next year's the past 5-year average the next 5-year average

next year's

The dividend growth model: Multiple Choice assumes dividends increase at a decreasing rate. only values stocks at Time 0. cannot be used to value constant dividend stocks. can be used to value both dividend-paying and non-dividend-paying stocks. requires the growth rate to be less than the required return.

requires the growth rate to be less than the required return.

Preferred stock may have all of the following characteristics in common with bonds with the exception of: Multiple Choice the lack of voting rights. a possible conversion option into common stock. annuity payments. a fixed liquidation value. tax-deductible payments.

tax-deductible payments.