Question Details

investment firm underwrites a stock issue




1.	If a corporation has only one class of stock, it is referred to as
a.	classless stock.
b.	preferred stock.
c.	solitary stock.
d.	common stock.



	2.	The term residual claim refers to a stockholders’ right to
a.	receive dividends.
b.	share in assets upon liquidation.
c.	acquire additional shares when offered.
d.	exercise a proxy vote.



	3.	Which of the following factors does not affect the initial market price of a stock?
a.	The company's anticipated future earnings
b.	The par value of the stock
c.	The current state of the economy
d.	The expected dividend rate per share



	4.	If an investment firm underwrites a stock issue, the
a.	risk of being unable to sell the shares stays with the issuing corporation.
b.	corporation obtains cash immediately from the investment firm.
c.	investment firm has guaranteed profits on the sale of the stock.
d.	issuance of stock is likely to be directly to creditors.



	5.	The par value of a stock
a.	is legally significant.
b.	reflects the most recent market price.
c.	is selected by the SEC.
d.	is indicative of the worth of the stock.





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