jusur 4 - : Would be significantly greater . 9 * An index...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Unit 4 ( Stocks , stock markets and market efficiency 1 * A Share of common stock represents : A Share of ownership of the company . 2 * The dividend-discount model predicts that stock prices : Should be high when dividends are high .   3 * If a public corporation goes bankrupt and doesn't have enough assets to pay off all creditors : The stockholders cannot lose more than their investment . 4 * You Start with a portfolio valued at $500. Over the next twelve months it loses 40 % ; the following year it has a gain of 30%. At the end of two years your portfolio is worth: $390 5 * Voting rights in a corporation are held by : The common stockholders . 6 * Two characteristics that make owning stock attractive are : Share prices are relatively inexpensive and are transferable . 7 * What do bondholders and stockholders have in common ? Both are claimants . 8 * Without the stockholders' limited liability, the risk from the use of leverage
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: : Would be significantly greater . 9 * An index number is valuable because : It provides a meaningful measurement scale to calculate percentage changes . 10 * The dividends that stockholders receive : Are distribution from profits . 11 * The concept of limited liability says a stockholder of a corporation : Cannot lose more than his/her investment . 12 * You Start with $1000 portfolio; it loses 50% over the next year, the following year it gains 50% in value. At the end of two years your portfolio is worth: $750 13 * In the event of Bankruptcy, stockholders : Are the last to be paid and could end up losing what they have invested . Unit 4 ( Stocks , stock markets and market efficiency (...
View Full Document

This note was uploaded on 02/12/2012 for the course ECON 101 taught by Professor Abrams during the Spring '11 term at Adams State University.

Page1 / 2

jusur 4 - : Would be significantly greater . 9 * An index...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online