金融市场与金融机构基础FabozziChapter17.docVIP

PAGE 24 Copyright ? 2010 Pearson Education Inc. Publishing as Prentice Hall Foundations of Financial Markets and Institutions, 4e (Fabozzi/Modigliani/Jones) Chapter 17 Markets for Common Stock: The Basic Characteristics Multiple Choice Questions 1 Common Stock Characteristics 1) Equity securities represent ________ interest in a corporation. Holders of equity securities are entitled to the earnings of the corporation when those earnings are distributed in the form of ________. The key distinction between common stock and preferred stock lies in the degree to which they may participate in any distribution of earnings and the priority given to each in the ________. A) an ownership; dividends; retainment of earnings B) an ownership; interest; distribution of earnings C) an ownership; dividends; distribution of earnings D) a potential; interest; retainment of earnings Answer: C Comment: Equity securities represent an ownership interest in a corporation. Holders of equity securities are entitled to the earnings of the corporation when those earnings are distributed in the form of dividends. They are also entitled to a pro rata share of the remaining equity in case of liquidation. The two types of equity securities are common stock and preferred stock. The key distinction between these two forms of equity securities lies in the degree to which they may participate in any distribution of earnings and the priority given to each in the distribution of earnings. Diff: 2 Topic: 17.1 Common Stock Characteristics Objective: 17.9 the implications of pricing efficiency for a common stock strategy 2) For common stock investors, the return realized by holding this investment comes from ________. A) dividend payments B) decrease in the price of the common stock C) decrease in the price of the common stock D) All of these Answer: D Comment: For common stock investors, the return realized by holding this investment comes from two sources: dividend payments and the change i