Finance chapter 9

A participation feature provides preferred stockholders with?

A share in the earnings that remain after required and stated dividends are paid.

For information on a company's stock prices, the most up-to-date of the following sources is

a quarterly report from company head quarters

What is the formula for calculating the total return on a stock?

Current return + Capital gain

What is the annual dividend paid by an investment and divided by the investment's current market value expressed as a percentage

Current yield

Ford is considered a what type of stock according to financial professionals?

Cyclical stock

net earnings/ Common stock outstanding

earnings per share

Pays higher than average dividends compared to other stock issues

income stock

Which request lets an account executive decide when to buy or sell a security and at what price?

limit order

A request to buy or sell the stock at current market value

market order

____ contain fewer than 100 shares of stock

odd lot

What do corporations not have to do for their stockholders?

pay dividends

market price per share/ earnings per share

price-earnings ratio

A market in which an investor purchases securities from a corporation through an investment bank or some other representative of the corporation

primary market

An investor purchases securities from a corporation through an investment bank in a

primary market

A legal document that transfers a stockholder's voting rights to someone else is a

proxy

A legal form that asks stockholders to transfer their voting rights is called a?

proxy

An investor can buy stock without going through and account executive by

reinvesting dividends

On the floors of the exchanges, stocks are traded in ____, or multiples of 100 shares of a particular stock

round lot

Investments such as stocks, bonds, mutual funds, options, and commodities are called

securities

Most over-the-counter stock is traded through

NASDAQ

The total amount of stocks and bonds issued by a corporation

Capitalization

Which company's stock do financial professionals consider cyclical stock?

Ford

The assignment dollar amount that is printed on a stock certificate is the

Par value

New companies or companies whose sales are unsteady issue ___, which typically sell for less than $1 a share.

Penny stock

Sells its shares openly in the stock markets where anyone can buy them

Public corporation

An investor can buy stock without going through an account executive by?

Reinvesting dividends

A stop order requests that a stockholder do what?

Sell a stock for a specific amount

Buying a stock on margin is an example of what kind of investment strategy?

Short-term investment

A calculation that indicates the annual dividends as well as any increase or decrease in the original purchase price of the investment

total return

current return + capital gain

total return

A ____ occurs when investors are pessimistic about the economy and sell stocks

bear market

Stock considered to be a conservative and safe investment is known as

blue-chip stock

Stock considered to be conservative and a safe investment is known as

blue-chip stock

Stock that is considered a conservative, safe investment is called

blue-chip stock

A ____ occurs when investors are optimistic about the economy and buy stocks

bull market

(selling price per share - purchase price per share) x Number of shares held

capital gain

Which investment has the highest risk of the following: Common stock, preferred stock, government bonds, savings accounts

common stock

Barron's financial magazine provide information about specific ____?

companies

The current yield of an investment equals the annual dividend divided by the investment's

current market value

The yield on an investment equals the annual dividend divided by the investments

current market value

dividend x Number of shares x years held

current return

Annual dividend/current market value

current yield

Stock that has market value that reflects the state of the economy is called

cyclical stock

Remains stable during the periods of decline in the economy

defensive stock

Stock that has steady earnings and continues paying dividends even during economic declines is known as?

defensive stock

Why do corporations split their stock?

to set an ideal price for stock