Exam 8: Firms, the Stock Market, and Corporate Governance

If you purchase a share of stock from your friend who initially purchased the stock three years ago,your purchase of the stock represents a transaction in the secondary financial market

A stock's dividend yield is determined by

If you want to know the present value of a future payment received in one year,what formula can you use?

The existence of the principal-agent problem

When someone takes out a mortgage loan to buy a house,the mortgage lender can take possession of the house and sell it if the borrower defaults by failing to make payments on the loan because the house is being pledged as ________ for the loan.

An increase in liabilities will reduce a firm's net worth.

Assume you set up a sole proprietorship and your lawyer tells you that as the owner you will face unlimited liability.What does that mean?

A corporation's management

A bond's coupon payment divided by the bond's current price is equal to the bond's

The three most widely followed stock indexes in the United States include all of the following except

Which type of business is the most difficult to set up?

What are the advantages of setting up a proprietorship or partnership as opposed to a corporation?

What happens in the primary market?

What happens in the secondary market?

An implicit cost is

Tanesha sells homemade candles over the Internet.Her annual revenue is $64,000 per year,the explicit costs of her business are $17,000,and the opportunity costs of her business are $22,000.What are the implicit costs of her business?

What do economists call the situation where a hired manager does not have the same interests as the owners of the business?

What is the present value of $888 in a one year if the current rate of interest is five percent?

What is an inside director?

When you buy previously-issued shares of Facebook stock,this transaction takes place in the