Chapter 8 - Stock Market Flashcard

Front

What rights and returns are associated with common stock ownership?

Back

Voting rights and potential capital gains

Front

How do stock exchanges function?

Back

By facilitating the buying and selling of stocks

Front

What is the purpose of stock indexes?

Back

To track the wider stock market

Front

What is the P/E ratio model used for?

Back

Assessing relative stock values

Front

What is a source of financial capital aside from debt?

Back

Equity

Front

How do public corporations raise money? Options: By issuing bonds, By issuing stocks, By taking loans, By selling assets

Back

By issuing stocks

Front

Why are investors willing to buy company stock?

Back

Because they can sell the stock during any trading day

Front

What determines the form of business ownership? Options: Market demand, Organizational structure, Government regulations, Company size

Back

Organizational structure

Front

What is common stock?

Back

An ownership stake in a corporation

Front

Which of the following factors does NOT affect the market value of common stock?
- Company's profitability
- Growth prospects for the future
- Current market interest rates
- The color of the company's logo

Back

The color of the company's logo