Business Finance Chapter 7 Learnsmart

Which of the following are reasons that make valuing a share of stock more difficult than valuing a bond?

Stock has no set maturity, the required rate of return is unobservable, dividends are unknown and uncertain

Examples of secondary markets in the US include which of the following?

The Chicago Stock Exchange, the NYSE, NASDAQ

Which of the following ratios might be used to estimate the value of a stock?

The Price/Sales ratio + The Price/Earnings ratio

The NYSE differs from the NASDAQ primarily because the NYSE has

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

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

cumulative

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

dealer

The fundamental business of the NYSE is to attract

order flow

NYSE Designated Market Members were formerly called

specialists

Which of the following are rights of common stock holders?

The right to vote on matters of importance, the right to share proportionally in any residual value in the event of liquidation, the right to share proportionally in any common dividends paid.

A person who brings buyers and sellers together is called a

broker