Stock market

The rate at which the value of an investment grows is called the:

• required return.

• dividend yield.

• capital return.

• capital gains yield.

The market in which new securities are originally sold to investors is called the _____ market.

• primary

• secondary

• open

• free

The market where one shareholder sells shares to another shareholder is called the _____ market.

• primary

• secondary

• open

• free

The current price of a share is based:

• primarily on the future value of the cash flows derived from the stock.

• solely on the anticipated future dividends.

• on the present value of all the future cash flows from that stock.

• strictly on the anticipated future stock price.

Which of the following statements is TRUE, according to the constant growth model?

• The higher the discount rate, the lower the stock price.

• The higher the holding period, the higher the stock price.

• The growth rate should be larger than the discount factor.

• The value of a stock depends on the holding period of an investor.

What is asset?

• An item of property owned by a person or company
• An item owned by a business that lasts for several years.

Short-term assets and short-term liabilities are referred to as the firm's:

• cash flow.

• capital budget.

• capital structure

• working capital.

What is NOT a source of Internal finance?

• Retained profit
• Sale of existing assets
• Issue of shares
• All are sources of Internal finance

A business organisation that is similar to a sole proprietorship but has two or more owners is called a:

• limited liability company.

• corporation.

• dual company.

• partnership.

Which ONE of the following relates to the ability of a business to pay its debts as they fall due?

• growth

• liquidity

• efficiency

• profitability