results in higher dividends per share. b. is included in every corporate charter. c. allows managers to buy additional shares below the current market price. d. protects bondholders and
results in higher dividends per share. b. is included in every corporate charter. c. allows managers to buy additional shares below the current market price. d. protects bondholders and
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
As a shareholder, preemptive rights are important because it
Select one:
a. results in higher dividends per share.
b. is included in every corporate charter.
c. allows managers to buy additional shares below the current market price.
d. protects bondholders and thus enables the firm to issue debt with relatively low interest rates
e. protects current shareholders against a dilution of ownership interests.
You recently sold 100 shares of Pfizer stock, and the transfer was made through a broker. This is an example of:
Select one:
a. A secondary market transaction.
b. A primary market transaction.
c. A money market transaction.
d. A futures market transaction.
e. An over-the-counter market transaction.
Which of the following statements is CORRECT?
Select one:
a. If a coupon bond is selling at par, its current yield equals its yield to maturity.
b. If rates fall after its issue, a zero-coupon bond could trade at a price above its maturity (or par) value.
c. If rates fall rapidly, a zero-coupon bond's expected appreciation could become negative.
d. If a firm moves from a position of strength toward financial distress, its bonds' yield to maturity would probably decline.
e. If a bond is selling at a premium, this implies that its yield to maturity exceeds its coupon rate.
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