Full download Fundamentals of Investing 13th Edition Smart Test Bank all chapter 2024 pdf

You might also like

Download as pdf or txt
Download as pdf or txt
You are on page 1of 44

Fundamentals of Investing 13th Edition

Smart Test Bank


Go to download the full and correct content document:
https://testbankfan.com/product/fundamentals-of-investing-13th-edition-smart-test-ba
nk/
More products digital (pdf, epub, mobi) instant
download maybe you interests ...

Fundamentals of Investing 13th Edition Smart Solutions


Manual

https://testbankfan.com/product/fundamentals-of-investing-13th-
edition-smart-solutions-manual/

Fundamentals of Investing 12th Edition Smart Test Bank

https://testbankfan.com/product/fundamentals-of-investing-12th-
edition-smart-test-bank/

Principles of Accounting 5th Edition Smart Test Bank

https://testbankfan.com/product/principles-of-accounting-5th-
edition-smart-test-bank/

Fundamentals of Financial Management 13th Edition


Brigham Test Bank

https://testbankfan.com/product/fundamentals-of-financial-
management-13th-edition-brigham-test-bank/
Principles of Accounting 5th Edition Smart Solutions
Manual

https://testbankfan.com/product/principles-of-accounting-5th-
edition-smart-solutions-manual/

Fundamentals Of Financial Management 13th Edition


Brigham Solutions Manual

https://testbankfan.com/product/fundamentals-of-financial-
management-13th-edition-brigham-solutions-manual/

Fundamentals of Selling Customers for Life through


Service 13th Edition Futrell Test Bank

https://testbankfan.com/product/fundamentals-of-selling-
customers-for-life-through-service-13th-edition-futrell-test-
bank/

Fundamentals of Selling Customers for Life through


Service 13th Edition Futrell Solutions Manual

https://testbankfan.com/product/fundamentals-of-selling-
customers-for-life-through-service-13th-edition-futrell-
solutions-manual/

Database Processing Fundamentals Design and


Implementation 13th Edition Kroenke Test Bank

https://testbankfan.com/product/database-processing-fundamentals-
design-and-implementation-13th-edition-kroenke-test-bank/
Fundamentals of Investing, 13e (Smart)
Chapter 6 Common Stocks

6.1 Learning Goal 1

1) Every shareholder is a part owner of the firm and, as such, has a direct claim on a portion of
the firm's assets.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

2) There is a stronger tendency for the stock market to increase in value rather than decrease in
value over time.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

3) Since 1960, returns on the Dow Jones Industrial Average have never been negative for 3
consecutive years.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

4) For most stocks, the returns from dividend income far exceeds the return from capital gains.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

5) Between 1930 and 2014, the average return on stocks exceeded 10%.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 1
1
Copyright © 2017 Pearson Education, Inc.
6) Between 1956 and 2011, approximately 30% of years had positive returns.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

7) In spite of major losses in 2008, by the end of 2014 stock prices, as measured by the S&P
500 index, were higher than their peak levels of 2007.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 1

8) Because common shareholders are entitled to the profits that remain after all of a
corporation's other obligations have been met, common shareholders are known as
A) residual owners.
B) temporary owners.
C) debt owners.
D) owners of last resort.
Answer: A
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

9) If stocks earn an average rate of return of 12 %, their value doubles every


A) 4 years.
B) 6 years.
C) 8 years.
D) 12 years.
Answer: B
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

2
Copyright © 2017 Pearson Education, Inc.
10) Which one of the following statements about common stock is true?
A) Common stock can provide attractive capital appreciation opportunities.
B) Dividends generally provide the greatest rate of return on common stocks.
C) Common stocks generally have a negative rate of return over a ten-year period.
D) The DJIA is the best indicator of the overall performance of common stocks.
Answer: A
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

11) Which of the following are benefits related to stock ownership?

I. ease of trading
II. attractive inflation-adjusted rates of return
III. guarantee of long-term positive returns
IV. affordability

A) I and II only
B) II and IV only
C) I and III only
D) I, II and IV only
Answer: D
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

3
Copyright © 2017 Pearson Education, Inc.
6.2 Learning Goal 2

1) A market correction is defined as a stock market decline of 10% or more.


Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 2

2) While many stocks increase in value over the long run, most of the return on stocks comes
from dividends.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

3) It is not unusual for bear markets to occur two or more times in any given 10 year period.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 2

4) Over the long term, the capital gain on most stocks will exceed the dividend income.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

5) Although bear markets on average occur every 3 to 4 years, the timing of bear markets is
very hard to predict.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 2

4
Copyright © 2017 Pearson Education, Inc.
6) For stocks in the S&P 500 index, returns from dividends exceeded capital gains over the
period 2000-2009.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 2

7) The period from late 2007 through the end of 2014 is best described as a prolonged bear
market.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Revised
Learning Goal: Learning Goal 2

8) For the period 2000 through 2009, the average annual price change for stocks in the S&P
500 index was
A) 16%.
B) 8%.
C) -1%.
D) -50%.
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Revised
Learning Goal: Learning Goal 2

9) The rate of return from dividends has been much higher in recent decades than it was in the
1930s and 40s.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 2

5
Copyright © 2017 Pearson Education, Inc.
10) $10,000 invested in the S&P 500 in March 2009 would have grown to more than $20,000
by the end of 2014.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 2

11) When residential real estate values fell sharply from 2006 to 2009, the stocks of financial
institutions were hardly impacted at all.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 2

12) Stocks generally have produced positive inflation-adjusted rates of return over the long-
term.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 2

13) An individual stock generally provides a


A) dividend payment that ensures total protection from purchasing power risk.
B) refuge from event risk.
C) current income that is less predictable than that available from other types of investments.
D) predictable annual rate of return.
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 2

6
Copyright © 2017 Pearson Education, Inc.
14) From October 2007 to March 2009, stock prices as measured by the S&P 500 Index
A) nearly doubled in value.
B) lost more than half their value.
C) declined by nearly 10%.
D) rose by nearly 25%.
Answer: B
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

15) From March 2009 to January 2012, stock prices as measured by the S&P 500 Index
A) more than doubled in value.
B) lost more than half their value.
C) declined by nearly 10%.
D) rose by nearly 25%.
Answer: A
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 1

16) Which of the following periods provided particularly high returns to stock investors?
A) February 1972-October 1974
B) March 2009-December 2014
C) September 2000-September 2002
D) October 2007-March 2009
Answer: B
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Revised
Learning Goal: Learning Goal 2

7
Copyright © 2017 Pearson Education, Inc.
17) From 1976 through 2014, the dividend yield on stocks has been ________ the coupon yield
on corporate bonds.
A) sometimes higher and sometimes lower than
B) on average, about the same as
C) consistently lower than
D) consistently higher than
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 2

18) The extraordinary run up in stock prices during the late 1990s primarily affected
A) energy stocks.
B) retail stocks.
C) pharmaceutical stocks.
D) technology stocks.
Answer: D
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 2

19) Many companies increased their dividends


A) whenever necessary to compensate shareholders for declining stock values.
B) in every year since 1950.
C) during the market decline of 2007-2008.
D) during the market recovery of 2009-2011.
Answer: D
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 2

8
Copyright © 2017 Pearson Education, Inc.
20) Which of the following are true about stock market returns as measured by the S&P 500
index?

I. In 2008 alone stocks in the index lost approximately 36% of their value.
II. $10,000 invested in the index in March 2009 would have been worth more than $20,000 by
the end of 2014.
III. From the beginning of 2000 to the end of 2010, the index more than doubled in value.
IV. Both stock and real estate prices recovered recovered strongly in the period between early
2009 and late 2014.

A) I II and III only


B) II, III and IV only
C) I ,II and IV only
D) I, and IV only
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 1

21) Describe the bear market of 2008 through early 2009 and the trend of stock prices in
subsequent years.
Answer: During the period 2008 through early 2009, stocks suffered some of their steepest
declines in stock market history. From October 2007 to March of 2009, U.S. stocks lost half
their value and the S&P 500 index declined by 36% in 2008 alone. Similar declines were
experienced in all the world's major markets. Stocks such as GE, that had increased dividends
for years , had to cut their dividends. However during the 2009-2011 period stocks more than
doubled in value and many corporations restored all or part of their dividend payments. The
bull market continued through 2014 with only a few brief corrections. (The summer of 2015,
however did see substantial declines in the major indexes.) Historically, stocks are quite risky
and periodically subject to large declines, but patience is rewarded by higher rates of return
than what is available from less volatile investments.
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Revised
Learning Goal: Learning Goal 2

9
Copyright © 2017 Pearson Education, Inc.
6.3 Learning Goal 3

1) Shares of publicly traded stock can be issued either through a public offering or a rights
offering.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

2) Companies typically issue new shares through an initial public offering (IPO).
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

3) Shareholders must either exercise their rights granted via a rights offering or let them expire
unused.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

4) Corporations often split their stocks when they believe that the price makes them less
attractive to average investors.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

5) The total value of an investor's holdings in a company will increase as a direct result of a
stock split.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

10
Copyright © 2017 Pearson Education, Inc.
6) Stock held in treasury is a means of increasing the number of shares outstanding.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Revised
Learning Goal: Learning Goal 3

7) Firms tend to repurchase shares of their outstanding stock when they view the shares as
undervalued.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

8) Different classes of stock generally have either different voting rights or different dividends.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

9) Electronic trading systems have increased transaction costs of odd-lot trades.


Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 3

10) Since each share of common stock represents ownership in a company, shares of common
stock are often referred to as
A) illiquid investments.
B) equity securities.
C) fixed-income securities.
D) unit-cost securities.
Answer: B
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

11
Copyright © 2017 Pearson Education, Inc.
11) Which one of the following statements about common stock is correct?
A) Each share of stock has a specified maturity date.
B) Common stock gives stockholders first title to a share of the company's earnings, prior to
other corporate obligations.
C) Common stock typically provides higher levels of current income than do similar grade
corporate bonds.
D) Each share of common stock of a given class entitles the holder to an equal ownership
position and an equal vote in the corporation.
Answer: D
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

12) Stocks that are readily available to the general public and that are bought and sold on the
open market are known as
A) initial public offerings.
B) publicly traded issues.
C) treasury stocks.
D) blue chip stocks.
Answer: B
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

13) When a company offers the investing public a certain number of shares of its stock at a
certain price, the company is making what is known as a
A) public offering.
B) rights offering.
C) stock spin-off.
D) treasury offering.
Answer: A
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Revised
Learning Goal: Learning Goal 3

12
Copyright © 2017 Pearson Education, Inc.
14) In a rights offering, the
A) existing stockholders are given the first opportunity to purchase new shares in proportion to
their current ownership position.
B) underwriter offers the investing public a certain number of shares at a certain price.
C) total equity remains constant while the number of shares of common stock outstanding
increases.
D) amount of debt in the capital structure increases by the amount of the rights offering.
Answer: A
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

15) Rob owns 300 shares of Blackwood common stock valued at $9 a share. Blackwood has
declared a 3-for-1 stock split effective tomorrow. After the split, Rob will own
A) 100 shares valued at about $27 a share.
B) 100 shares valued at about $3 a share.
C) 900 shares valued at about $27 a share.
D) 900 shares valued at about $3 a share.
Answer: D
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

16) Engines, Inc. declares a 4-for-10 stock split. The stock currently sells for $3 a share. A
shareholder who owned 1000 shares of stock prior to the split will now own
A) 400 shares valued at about $7.50 a share.
B) 40 shares valued at about $1.20 a share.
C) 250 shares valued at about $7.50 a share.
D) 250 shares valued at about $1.20 a share.
Answer: A
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

13
Copyright © 2017 Pearson Education, Inc.
17) When a corporation declares a stock split, it usually does so because
A) the firm's retained earnings are excessive.
B) there are too many shares of stock outstanding.
C) investors sometimes require nontaxable returns.
D) it wants to make its stock more affordable to average investors.
Answer: D
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

18) Stock which has been issued and subsequently reacquired by the issuing corporation is
called
A) letter stock.
B) treasury stock.
C) classified stock.
D) book stock.
Answer: B
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

19) Tiffany owned 1000 shares of GIA stock which was selling for $1.50 per share when the
company declared a 1 for 10 reverse split. After the split, Tiffany owned
A) 10,000 shares worth approximately $1.50 per share.
B) 10,000 shares worth approximately $0.15 per share.
C) 100 shares worth approximately $15 per share.
D) 100 shares worth approximately $1.50 per share.
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

14
Copyright © 2017 Pearson Education, Inc.
20) Which of the following is unlikely to be found in an internet stock quotation?
A) earning per share (EPS)
B) beta
C) previous day's closing price
D) broker's commission per 100 shares
Answer: D
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 3

21) What are the effects of a company repurchasing its own stock as Treasury shares?
A) usually negative in the short term but uncertain over the long term
B) usually positive in the short term but uncertain over the long term
C) usually positive in both the short term and the long term
D) no effect in either the short term or the long term
Answer: B
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

22) One motive for issuing classified stock with different voting rights is to
A) increase the market value of the company.
B) avoid SEC reporting requirements.
C) allow the company's founders to retain control of the company.
D) facilitate the issue of additional shares in the future.
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

15
Copyright © 2017 Pearson Education, Inc.
23) Stock quotes on most Internet service providers such as Yahoo Finance include

I. the highest and lowest price over the last 52 weeks.


II. the closing price for the previous trading day.
III. the opening price for the day.
IV. the bid price and ask price.

A) I and III only


B) II and IV only
C) I, II and III only
D) II, III and IV only
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Revised
Learning Goal: Learning Goal 3

24) A round lot consists of


A) 1 share.
B) 10 shares.
C) 100 shares.
D) 1,000 shares.
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

25) Assume the Plum Corporation has two different issues of common stock. One issue carries
voting rights, and the other issue does not. In this situation, Plum is said to have issued
A) buy-back stock.
B) treasury stock.
C) OTC stock.
D) classified stock.
Answer: D
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

16
Copyright © 2017 Pearson Education, Inc.
26) Why do some companies split their stock?
Answer: A stock split reduces the number of shares outstanding while decreasing the price per
share. Firms often declare splits when their stock is trading at a price which they consider to be
too high to attract the types of investors they seek.
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 3

6.4 Learning Goal 4

1) A stock's market value would normally be higher than it's book value.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 4

2) A stock's book value and par value are normally the same or nearly the same.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 4

3) A stock can have only one market value, but different investment values for different
investors.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 4

4) A stock's investment value can be much higher than its book value.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 4

17
Copyright © 2017 Pearson Education, Inc.
5) The investment value for a publicly traded stock can readily be found in the financial section
of the newspaper or on the Internet.
Answer: FALSE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 4

6) If a firm has a 2 million shares outstanding and its stock trades at $25 per share, the company
has a market capitalization of $50,000,000.
Answer: TRUE
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 4

7) Another term for the stated value or face value of a stock is its
A) book value.
B) liquidation value.
C) par value.
D) proxy value.
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 4

8) The par or stated value of common stock is important for


A) accounting purposes only.
B) helping the investor determine the stock's intrinsic value.
C) helping the board of directors determine the dividend payout.
D) helping the market determine the trading price of the stock.
Answer: A
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 4

18
Copyright © 2017 Pearson Education, Inc.
9) The balance sheet value of a firm's assets minus the balance sheet amount of its liabilities is
known as
A) par value.
B) book value.
C) liquidation value.
D) market value.
Answer: B
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: New Question
Learning Goal: Learning Goal 4

10) If a firm has a 2 million shares outstanding and its stock trades at $25 per share, the
company also has $10,000,000 in debt. The company's market capitalization is
A) $40,000,000.
B) $49,000,000.
C) $50,000,000.
D) $60,000,000.
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 4

11) Westlake Industries has total assets of $42.5 million, total debt of $29.3 million, and $2.4
million of 6% preferred stock outstanding. If the company has 250,000 shares of common stock
outstanding, its book value per share would be
A) $32.33.
B) $33.60.
C) $43.20.
D) $52.80.
Answer: C
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 3 Analytical thinking
Question Status: Previous Edition
Learning Goal: Learning Goal 4

19
Copyright © 2017 Pearson Education, Inc.
12) As a general rule, which one of the following statements concerning the various values of
common stock is correct?
A) Market values are usually below book values.
B) Par values are usually above book values.
C) Market values are usually below par values.
D) Book values are usually below market values.
Answer: D
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Previous Edition
Learning Goal: Learning Goal 4

13) Which of the following will tend to increase transaction costs?


A) using a full service broker
B) buying or selling shares through an on-line broker
C) buying or selling more than 1000 shares in a single trade
D) buying or selling at times when volume is high and the exchanges are busy
Answer: A
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 8 Application of knowledge (Able to translate knowledge of business and management
into practice)
Question Status: Revised
Learning Goal: Learning Goal 4

14) The Charbridge Inc. has 4 million shares of stock outstanding. The stock has a par value of
$1.00 per share and is currently trading at $36 per share. Nicole estimates the investment value
of this stock at $38.50. According to this information, the market capitalization of Charbridge
is
A) $144,000,000.
B) $154,000,000.
C) $4,000,000.
D) $72 million.
Answer: A
Learning Outcome: F-09 Discuss the fundamentals of stocks and how to value them
AACSB: 3 Analytical thinking
Question Status: New Question
Learning Goal: Learning Goal 4

20
Copyright © 2017 Pearson Education, Inc.
Another random document with
no related content on Scribd:

2 portfire sticks on trail.
┃ NEAR AXLETREE
OFF AXLETREE BOX.
BOX.
┃ 2 covers.
1 1 1 ┃ 10 flints.
com. com. com.
┃ 1
case. case. case. gunlock.
1 prim. Slow
irons. match,
2
3 lb.
punches.
2 spikes
cm.
1 do.
3 solid shot.
spring.
1 spunge
hd.
2 th.
stalls.
Light 6 Pounder Ammunition Waggon.
LIMBER.
NEAR BOX. OFF BOX.
8
shrapnell.
8 solid 8 solid 8 solid
shot. shot. shot.
4
11 1½ lb.
common
4
12 1½ lb. 13 1½ lb. case,
common cartridges.
case, 12 1½ lb. under.
cartridges. cartridges.
under. 8 2½ oz.
cartridges.
bursters.
4 solid 4 solid
slow 32 fuzes, 100
shot, shot,
match. in tubes.
4 6
over. over.
bundles. portfires,
6 slow
on lid.
portfires, match.
quick
on lid.
match.

MIDDLE BOX.

1 washer.
1 linchpin.
2
couples.


FORE BOX:
15 sets of horse-shoes. ┃ 5 sets of horse-
shoes.
10 shrapnell.
16 1½ lb. 15 solid shot.
cartridges.
20 solid shot, 10 2½ oz.
in bursters.
27 1½ lb.
2 tiers. 40 fuzes,
cartridges.
in 4 bundles.
100 tubes. 1 tube pocket.
12 1½ lb.
quick match.
cartridges.
1 skein
6 portfires.
marline.
slow match.

HIND BOX.

15 solid shot. 10 solid shot. 30 solid shot,


in 3 tiers.
27 1½ lb. 18 1½ lb.
cartridges. cartridges.
5½ lb. slow
100 empty 1 skein Hambro’
match.
flannel line.
cartridges.
8 Inch Howitzer.
LIMBER.
NEAR BOX. OFF BOX.
2 common shells,
2 shrapnell. in 1 tier.
6 4 lb. cartridges. 6 4 lb. cartridges.
6 15 oz. bursters. 6 1 lb. 14 oz. bursters.
64 shrapnell fuzes, MIDDLE BOX. 2 tube pockets.
in 4 bundles. 2 thumb-stalls.
2 fuze bags. 2 couples. 100 tubes.
6 fuze boxes. 6 portfires, on lid.
6 portfires, on lid. 1 linchpin.

1 washer. 2 common 2 common


2 shrapnell, 2 shrapnell, shells, in shells, in
in 2 tiers. in 2 tiers. 2 tiers. 2 tiers.
1 skein slow 15 common
┃ match. fuzes.

WAGGON BODY.
FORE BOX.
10 sets of horse-shoes. ┃ 10 sets of
horse-shoes.

2 shrapnell, 1 shrapnell,
8 4 lb. cartridges.
in under.
1 common
2 tiers.
case,
7 15 oz. bursters. over.

2 shrapnell, 28 shrapnell 2 shrapnell,


in fuzes, in
2 tiers. in 4 bundles. 2 tiers.
1 skein—
match.

HIND BOX.
1 common
shell,
2 common
under.
shells,
1 common
8 4 lb. cartridges. in 2 tiers.
case,
over.
1 common
6 1 lb. 14 oz.
shell,
2 common
under. bursters.
shells,
1 common
in 2 tiers.
case,
over. 50 empty flannel
1 skein 1 skein
cartridges.
Hambro’ marline.
line.
32 Pounder Howitzer.
LIMBER.
NEAR BOX. OFF BOX.
2 common
2 shrapnell.
shells.
2 3 lb. 2 3 lb.
cartridges. cartridges.
2 7 oz. 2 12 oz.
bursters. bursters.
MIDDLE BOX.
2 common
case.
4 common
4 shrapnell.
shells.
4 3 lb. 2 3 lb. 4 3 lb.
cartridges. cartridges. cartridges.
4 7 oz. 4 12 oz.
bursters. bursters.


2 portfire sticks on trail.

OFF NEAR
AXLETREE ┃ AXLETREE
BOX. BOX.

┃ Slow match.
32-Pounder Howitzer Ammunition Waggon.
NEAR BOX. OFF BOX.
4 6 6
12 3 lb. 12 3 lb.
shrapnell. common common
2
MIDDLE shells, shells,
shrapnell, cartridges. cartridges.
in 2
BOX. in 2 in 2
tiers.
2 12 12
10 7 oz. tiers. tiers.
common oz.
case.
bursters. bursters.


FORE BOX.
10 sets of horse-shoes. ┃ 10 sets of
horse-shoes.

3 common
6 shrapnell.
shells.
6 shrapnell,
9 3 lb. 6 3 lb.
in 2 tiers.
cartridges. cartridges.

12 7 oz. 3 12 oz.
bursters. bursters.

HIND BOX.

3 common 6 common
shells. shells.
6 common
shells,
6 3 lb. 9 3 lb.
in 2 tiers.
cartridges. cartridges.
6 12 oz. 9 12 oz.
bursters. bursters.
grease magazine. 10 sets of horse-shoes.
24-Pounder Howitzer.
LIMBER.
NEAR BOX. OFF BOX.
12 2½ lb. cartridges;
12 6 oz. bursters;
1 auger; 1
corkscrew; 1
funnel; 2 fuze 12 2½ lb. cartridges; 8
boxes; 2 fuze 10 oz. bursters; 10
bags, 12 fuzes in common fuzes; 1 pr.
each; 50 empty compasses; 2 files;
flannel cartridges; 1 rasp; 1 rule; 1
1 knife; 1 mallet; 2 scraper; 1 tube
needles; 1 pr. pocket; 100 tubes; 1
pincers; 1 saw tin primer.
set; 1 pr. scissors;
2 setters; 1 oz.
worsted; quick
match.
MIDDLE BOX.
4 common
} lower
shells
2 common
2 washers. } tier.
case
12 shrapnell, in 2
tiers.
4 common
2 linchpins. } upper
shells
2 common
} tier.
case
2 couples.
6
} 6 portfires on lid.
portfires
1 saw } on lid. slow match.
1 hammer.

2 portfire sticks on trail.

OFF AXLETREE ┃ NEAR AXLETREE
BOX. BOX.

Slow match. ┃ Slow match.

1 set priming irons;
2 covers; 10
1 set priming
flints; 1 gunlock;
irons.
2 punches; 1
spring spike; 2
1 tin primer.
com. spikes; 2
thumb-stalls.
24-Pounder Howitzer Ammunition Waggon.
LIMBER.
NEAR BOX. OFF BOX.
12 2½ lb.
12 2½ lb. cartridges.
cartridges.
12 6 oz.
8 10 oz. bursters.
bursters.
48 shrapnell
10 common fuzes.
fuzes,
in 4 bundles. MIDDLE BOX. 1 tube pocket.
quick match. 100 tubes.
4 common
1 washer. } lower
shells
2 common
} tier.
case
4 common
12 shrapnell, 1 linchpin. } upper
shells
2 common
in 2 tiers. } tier.
case
6 portfires, on
2 couples. 6 portfires on lid.
lid.
slow
match.

FORE BOX.
10 sets of horse-shoes. ┃ 10 sets of
horse-shoes.
18 2½ lb.
cartridges.
18 6 oz. 18 shrapnell in 2 tiers.
bursters.
72 shrapnell
fuzes, in 4 1 skein of slow match.
bundles.
Quick match.

HIND BOX.

7 common
}
shells
2 carcasses } lower tier.
9 common shells, upper tier. 18 2½ lb.
1 skein marline. cartridges.
1 skein Hambro’ line.
1 spunge head. 16 10 oz.
1 rammer head. bursters.
50 empty flannel cartridges.
20 common fuzes.
12-Pounder Howitzer.
LIMBER.
NEAR BOX. OFF BOX.
12 shrapnell, 6 shrapnell. 2 common 12 common
in 2 tiers. 18 1¼ lb. shells shells, in 2
1 auger. cartridges. 4 common tiers.
1
1 corkscrew. 18 4½ oz. case.
compasses.
17 common
1 funnel. bursters. 18 1¼ lb.
fuzes.
2 fuze
1 knife. cartridges. 2 files.
boxes.
1 mallet. (C and D), 14 5 oz. 1 hammer.
2 needles. 16 in each. MIDDLE BOX. bursters. 1 rasp.
1 pr. pincers. 2 fuze bags, 1 rule.
(E and 1 1 shell
1 saw set. 1 washer.
inch,) scraper.
1 pr.
18 in each. 1 linchpin. 6 portfires, slow match.
scissors.
2 setters. quick match. 2 couples. on lid. 1 tin primer.
1 oz.
6 portfires, 1 saw, on lid. 100 tubes.
worsted.
1 tube
72 fuzes. on lid.
pocket.


2 portfire sticks on trail.
OFF AXLETREE ┃ NEAR AXLETREE
BOX. BOX.

┃ 2 covers.
slow match. ┃ 10 flints.
1 gun lock.
1 prim.
1 set priming Slow
irons.
irons. 2 punches. match.
2 com.
spikes.
1 tin primer. 1 spg.
spike.
2 thb.
stalls.
12-Pounder Howitzer Ammunition Waggon.
LIMBER.
NEAR BOX. OFF BOX.
12 shrapnell, 6 shrapnell. 2 common 12 common
in 2 tiers. shells. shells, in
18 1¼ lb. MIDDLE BOX. 4 common 2 tiers.
72 fuzes, in cartridges. case. 17 common
4 bundles. 1 washer. 18 1¼ lb. fuzes.
18 4½ oz. 1 linchpin. cartridges. slow match.
Slow match. bursters. 2 couples. 14 4½ oz. 1 shell
bursters. scraper.
6 portfires, quick match. 6 portfires. 100 tubes.
1 tube
on lid.
pocket.

FORE BOX.
15 sets of horse-shoes. ┃ 15 sets of horse-
shoes.

16 shrapnell, 28 1¼ 16 shrapnell,
in 2 tiers. cartridges. in 2 tiers.
8 1¼ lb.
cartridges, 32 4½ oz. 64 fuzes in 2
over. bursters. bundles.
64 fuzes in 2
bundles. quick match. slow match.

HIND BOX.

4 com.
16 common }
shells
4
shells, in 28 1¼ lb. } under.
carcasses
2 tiers. cartridges. 8 common shells,
34 common above.
1 skein Hambro’
fuzes.
line.
100 flannel 28 5 oz. 1 skein marline.
cartridges, bursters. 1 rammer head.
empty. 1 spunge head.
Sec. 34. Weight of Riders, Harness, Ordnance, Carriages, &c., of a
Field battery equipped.

st. lb.
{ Riding set of harness, with head-collar and chain 4 8
{ Driver, in marching order (including greatcoat
12 3
and apron)
{
Lead { Total weight carried by riding horse 16 11
{
{ Off set, with head-collar, chain, &c., and man’s
5 4
kitt

{ Riding set of harness, with head-collar and chain 5 0


{ Driver, in marching order (including greatcoat
12 3
and apron)
{
Wheel { Total weight carried by riding horse 17 3
{
{ Off set of harness, with head-collar, chain, &c.,
6 2
and man’s kitt

Mounted N. C. officer’s appointments, including


5 2
greatcoat, apron, and kitt
Non-commissioned officer 12 10

Total weight carried by horse 17 12

The average weight of an Artillery horse is 10 cwt. 2 qrs.


Ordnance, Carriages, and Stores.

24- 12-
12- 9- Light 6-
pounder pounder
pounder. pounder. pounder.
howitzer. howitzer.
cwt. qrs. cwt. qrs. cwt. qrs. cwt. qrs. cwt. qrs.
lb. lb. lb. lb. lb.
Gun, carriage, and limber 39 2 15 33 1 23 32 3 3 24 2 7 23 3 11
Side arms, intrenching tools,
3 14 3 10 2 25 2 23 3 2
&c.
Ammunition, &c. 3 3 17 3 3 20 4 3 25 3 3 15 3 2 16
Total 44 1 18 38 0 25 38 1 25 29 0 17 27 1 1
Waggon limber & body,
19 1 14 19 0 26 17 0 25 17 0 25 18 2 26
including spare wheel
Stores, intrenching tools,
4 0 7 4 0 7 4 0 7 4 0 7 4 0 7
spare horse-shoes, &c.
Ammunition 11 3 26 10 3 16 12 0 5 10 1 9 10 2 8
Total 35 1 19 34 0 21 33 1 9 31 2 13 33 1 13
Off Leader. Shaft Harness.
OFF LEADER

R Collar
A Pad or Off Saddle
S The Hames
B Surcingle
T The Housing
C Girth of the Pad
U The Housing Strap
D Pannel of Do V Shoulder Link & Hook
E Pad Staples W Breast Chains or Links
F Trace X Wither Strap
G Pipe of Do Y Bearing Hook
H Hook of Do Z Cantle of Pad
I Belly Band of Do a Sheepskin
J Trace Lines b Valise
K Bearing Strap c Baggage Strap
L Buckling Piece of Do d Mess Tin
M Hip Strap e Do. Strap
N Buckling Piece of Do f Buckle of Do
O Crupper g Wooden Canteen
P Crupper Ring h Forage Cord
Q Buckling Piece of Crupper i Nose Bag

THE BRIDLE. SHAFT HARNESS.

1 Winker k Pad or off Saddle


2 Front or Brow Band l Back Band
3 Cheek m Shaft Tugs
4 Cheek Billets n Bearing Strap
5 Throat Lash o Breeching
6 Bearing Rein r Strap of Breeching
7 Bit s Loin Strap
8 Cheek of Do t Hip Strap
9 Leading Rein
10 Bar of the Bit
11 Head-Collar
12 Nose Band
13 Collar Chain
14 Jowl Strap
15 Side Rein

You might also like