C. 5.88 percent; 2.94 percent
You buy a stock for $34 per share and sell it for $36 after you collect a $1.00 per share dividend. Your pre-tax capital
... [Show More] gain yield is ________________ and your pre-tax dividend yield is ________________.
A. 2.94 percent; 2.78 percent
B. 8.82 percent; 0.00 percent
C. 5.88 percent; 2.94 percent
D. 5.56 percent; 2.78 percent
E. 4.65 percent; 3.17 percent
A. I only
Common stocks typically have which of the following that bonds do NOT have?
I. Voting rights
II. Fixed cash flows
III. Set maturity date
IV. Tax deductibility of cash flows to investors
A. I only
B. I, II, and IV only
C. II, III, and IV only
D. IV only
E. I, II, III, and IV
D. 9.80 percent.
You buy a stock for $30 per share and sell it for $33 after holding it for slightly over a year and collecting a $0.75 per share dividend. Your ordinary income tax rate is 28 percent and your capital gains tax rate is 20 percent. Your after-tax rate of return is
A. 8.00 percent.
B. 10.25 percent.
C. 12.50 percent.
D. 9.80 percent.
E. 8.75 percent.
C. $0.78
An investor has a 38 percent ordinary income tax rate and a 20 percent long-term capital gains tax rate. The investor holds stock in a firm that could pay its usual $1 per share dividend or reinvest the cash in the firm. The stock price is currently $30 per share. If the firm does not pay the dividend, the share price will rise. If it pays the dividend, the share price will stay the same. By how much must the share price rise if the dividend is not paid in order to make the investor indifferent between receiving the dividend or not?
A. $1.00
B. $0.59
C. $0.78
D. $0.97
E. $0.50
E. cumulative
With ____________ voting, all directors up for election are voted on by the shareholders at the same time in one general election.
A. straight
B. participating
C. nonparticipating
D. proxy
E. cumulative
A. cumulative
If all preferred dividend payments that have been missed must be paid before any common stock dividend can be paid, the preferred stock is called _____________ preferred stock.
A. cumulative
B. participating
C. nonparticipating
D. voting
E. dual class
B. Euronext
In 2007 the NYSE merged with _________________.
A. Nasdaq
B. Euronext
C. American Exchange
D. Chicago Mercantile Exchange
E. London Stock Exchange
E. none of the options
If the net proceeds are greater than the gross proceeds in an underwritten offering, then
A. the investment banker made a profit on the spread.
B. the issuing company underpriced its securities.
C. the issue fails to occur.
D. the SEC rescinds the issue.
E. none of the options
D. allow existing shareholders to buy shares of the new offering if they desire
The preemptive right is designed to
A. allow management to diffuse stock ownership any voting power
B. allow managers to preempt a stock offering if they do not like the terms of the deal
C. allow existing shareholders the right to sell their existing shares before the new offer
D. allow existing shareholders to buy shares of the new offering if they desire
E. none of the options
B. SOE System.
The NASDAQ automatic order execution system for individual traders placing buy or sell orders of 1,000 or fewer shares is called the
A. ECN Network.
B. SOE System.
C. NASDAQ/AMEX Joint Program.
D. Instinet Network.
E. E*Trade Online Program.
E. red herring prospectus.
The preliminary version of a security offer that is circulated to potential buyers before SEC approval (registration) is obtained is called a
A. final prospectus.
B. shelf registration statement.
C. due diligence draft.
D. waiting period offer.
E. red herring prospectus.
A. 20-; two
A shelf registration allows firms the opportunity to avoid the normal ______________ day waiting period by allowing preregistration of securities for up to ______________ years.
A. 20-; two
B. 10-; one
C. 15-; three
D. 20-; one
E. 30-; two
B. I and IV only
Which of the following is/are true about specialists?
I. Investment banks generally cannot be specialists.
II. Specialists are used by the NASDAQ system.
III. Market and limit orders are transacted at specialist posts, but the specialist's own account orders are executed elsewhere.
IV. Specialists help maintain continuous trading.
A. I, II, and III only
B. I and IV only
C. II, III, and IV only
D. I only
E. III only
B. I and II only
As of December 2005, trading licenses are required to conduct trades on the floor of the NYSE. Which of the following statements about these trading licenses is/are correct?
I. Licenses are auctioned off in a special type of auction called a Dutch auction.
II. The NYSE determines the minimum bid price.
III. The SEC determines the maximum bid price.
IV. Trading licenses are good for 10 years.
A. II and III only
B. I and II only
C. I and III only
D. II and IV only
E. I, II, III, and IV
D. stock rating
Which of the following information is NOT usually found in a Wall Street Journal stock quote?
A. dividend yield
B. price-earnings ratio
C. closing price of the stock
D. stock rating
E. ticker symbol
D. NYSE; NASDAQ
In terms of volume of trading and market value of firms traded, the _____________ is the largest U.S. stock market. In terms of number of firms traded, the ___________ is the largest in the United States.
A. NYSE; NYSE
B. NASDAQ; NYSE
C. NYSE; AMEX
D. NYSE; NASDAQ
E. NASDAQ; AMEX
D. highest bid and lowest ask
On the NASDAQ system, the inside quotes are the
A. lowest ask and lowest bid
B. lowest bid and highest ask
C. highest bid and highest ask
D. highest bid and lowest ask
E. none of the options
E. improving the stock's price, generating increased publicity for the firm, and providing easier access to primary market capital.
NYSE listing has traditionally benefited a firm by
A. improving the stock's price.
B. generating increased publicity for the firm.
C. providing easier access to primary market capital.
D. generating increased publicity for the firm and providing easier access to primary market capital.
E. improving the stock's price, generating increased publicity for the firm, and providing easier access to primary market capital.
E. I, II, and III only
Which of the following indexes are value-weighted?
I. NYSE Composite
II. S&P 500
III. NASDAQ Composite
IV. Dow Jones Industrial Average
A. I, II, III, and IV
B. I only
C. II only
D. II, III, and IV only
E. I, II, and III only [Show Less]