Exam 14: Investing in Stocks

Sean Rouse owns shares of common stock in Stowaway Transportation Company. The company is getting ready to pay a dividend. Sean knows he must be registered on the corporation's books on the _______ date in order to receive the dividend.

When a stock splits two-for-one, you should expect the price per share to:

A stock issued by a company that has a market capitalization of $300 million or less would be classified as what type of stock?

Which one of the following statements is true?

Last year, High-Tech Electronics earned $1.50 per share. If the current market value for a share of stock is $45, what is the firm's P-E ratio?

A stock that follows the business cycle of advances and declines in the economy is called a(n) ____________ stock.

A large cap stock is a stock issued by a company that has capitalization of $10 billion or more.

What is the primary difference between common stock and preferred stock?

Which one of the following is a true statement?

ABC Corporation has assets that total $12 million and liabilities that total $4 million. It also has 500,000 shares of stock outstanding. What is the ABC's book value per share?

The type of stock in which stockholders are assured that omitted dividends will be paid to them before other dividends are paid is ____________ stock.

A securities exchange is a marketplace where member brokers who are representing investors meet to buy and sell securities.

Before a 2-for-1 stock split, Lisa's stock was valued at $50 per share. What is her per share value after the split?

An investment theory based on the assumption that a stock's intrinsic or real value is determined by the future earnings of the company is called the ____________ theory.

Assume that you purchased 100 shares of a stock for $55 a share, that you received an annual dividend of $2.00 a share, and that you sold your stock for $65 a share at the end of one year. What is the total return on your investment? (Ignore commission amounts for this question.)

A market order is a request that a stock be purchased or sold at the current market price.

Barker Creek Clothing has after-tax income of $12.8 million. It also has 32 million shares of stock outstanding. What is the firm's earnings per share?

Which one of the following statements is true?

Anthony Edwards wants to diversify his portfolio by adding a stock that maintains a stable value when the economy declines. What type of stock does Anthony want to add to his portfolio?

ABC Corporation holds its annual meeting in April. Maxine Star, who owns stock in the company, cannot attend the meeting. She can vote by: