Investing in Stocks

A corporation's after-tax earnings divided by the number of outstanding shares equals the earnings per share

The price of a share of stock divided by the number of outstanding shares is the price-earnings ratio

Why is equity financing a popular choice to provide long-term financing for a corporation?

A small-cap stock is defined as a corporation that has total capitalization of

What stock has the potential of earning above-average profits when compared to other firms in the economy?

Eight percent has been the average return on stocks since 1926

A stock owner in a company can vote by _____ if they are unable to attend an annual meeting

A request that a stock be purchased or sold at the specified market price is a limit order

What is the excessive buying and selling of securities to generate commissions called?

A request that a stock be bought or sold at the current market price is what type of order?

Conservative investors are usually attracted to a(n) ____ stock since it is a very safe investment

Blue-chip stocks can be considered a very conservative investment for most investors

Churning is illegal and hard to prove, but usually decreases investor profits

A market for existing financial securities that are currently traded among investors is the secondary market

Common stockholders receive cash dividends before preferred stockholders

What stock follows the business cycle of advances and declines in the economy?

What market is for existing financial securities that are currently traded between investors?

What stock remains stable during declines in the economy?

Money is borrowed from a brokerage firm or financial institution when investors purchase stock on margin

An increase or decrease in the value of a stock is least significant in a corporation's ability of future earnings

Dividends are paid out of profits, and

The Nasdaq is an electronic marketplace for over 5,000 to 8,000 different stocks

Corporations issue stock because it is a form of equity financing

A(n) ____ market is a market for existing financial securities that are currently traded between investors

Since 1926, which of the following investments had the best return?

The par value for a share of a preferred stock is

What kind of stock pays higher than average dividends?

Preferred stock that can be exchanged for common stock is

The amount determined by the board of directors is guaranteed on common stocks, but the dividend payments are not

Stocks that usually sell for less than one dollar are called penny stocks

Corporations do not have to repay stockholders the money they invested in the company at the maturity date

What is a stock issued by a corporation that has a large amount of capitalization called?

Which is not a true statement