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Exam 7: Equity Markets and Stock Valuation

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Question 61

Multiple Choice

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Which one of the following is a web site that enables Lester to sell his shares of ABC stock directly to Marti?

A) SuperDOT
B) POST
C) ECN
D) SEAT
E) eNET

F) B) and E)
G) B) and D)

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Question 62

Multiple Choice

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You have agreed to pay a five percent commission to your best friend if he can locate a buyer for your car. This arrangement is most similar to the compensation arrangement for which one of these individuals who is involved with the stock market?

A) Specialist
B) Floor trader
C) Market maker
D) Commission broker
E) Dealer

F) D) and E)
G) B) and D)

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Question 63

Multiple Choice

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Kathryn owns 18,700 shares of Global Importers. Her shares have a total market value of $787,270. In total, the firm has 65,000 shares outstanding. Each share is entitled to one vote under the straight voting policy of the firm. The next election is in four months at which time two directors are up for election. How much more must Kathryn invest in this firm to guarantee that she is elected to the board?

Healthy Foods just paid its annual dividend of $1.45 a share. The firm recently announced that all future dividends will be increased by 2.8 percent annually. What is one share of this stock worth to you if you require a 14 percent rate of return?

There are four open positions on the board of directors of Double Tree Restaurants. The company has 180,000 shares of stock outstanding. Each share is entitled to one vote. How many shares of stock must you own to guarantee your personal election to the board of directors if the firm uses cumulative voting?

Mary owns 100 shares of stock. Each share entitles her to one vote per open seat on the board of directors. Assume there are 3 open seats in the current election and Mary casts all 300 of her votes for a single candidate. What is the term used to describe this type of voting?

Computing the present value of a growing perpetuity is most similar to computing the current value of which one of the following?

An agent who buys and sells securities from inventory is called a:

The specific location on the floor of an exchange where a particular security is traded is called a:

Which one of the following features applies to NASDAQ but not the NYSE?