Stock Market Quiz

How does preferred stock differ from common stock?

• 1st: preferred stockholders receive a fixed dividend that never changes, a share of Preferred Stock is like a bond

• 2nd: because dividend that never changes, the price of preferred stock is relatively stable

• 3rd: preferred stockholders do not usually vote unless the firm has failed to pay the promised dividend

• 4th: preferred stockholders hold a claim on assets that has priority over the claims of common shareholders but after that of creditors such as bondholders.

What is the formula of The One-Period Valuation:

What is the formula of The Generalized Dividend valuation Model

What is the formula of The Gordon Growth Model

What is the formula of Price earnings Valuation Method:

What is not the advantage of ECNs?

• Transparency

• Cost reduction

• Lower execution

• After-hours trading

What is bid price?

• the price they sell the stocks for

• prices are negotiated directly between buyers and sellers

• the price they pay for stocks

• securities not listed on one of the Exchanges will trade in the OTC market

What is preferred stock?

• right to vote for directors and on certain issues

• certain rights regarding the Company

• stockholders have a claim on all assets, income or profits of a business after all other claimants have been satisfied

• a form of equity from a legal and tax standpoint

What is ECNs?

• the price they sell the stocks for

• prices are negotiated directly between buyers and sellers

• securities not listed on one of the Exchanges will trade in the OTC market

• an electronic network that brings together major brokerages and traders so that they can trade between themselves and bypass the middleman

Ownership of stock gives…

• a claim on all assets

• income or profits of a business

• certain rights regarding the Company

• nothing