1. You are attempting to value a stock in a mature industry that is steadily shrinking in size. Of the stock valuation models studied, the most appropriate is the .

a. perpetuity model

b. constant growth model

c. supernormal growth model

d. nonconstant growth model

2. Stocks are different from bonds because _____________

a. Stocks, unlike bonds, are major sources of funds

b. Stocks, unlike bonds, represent ownership

c. Stocks, unlike bonds, give owners legal claims to payments

d. Bonds, unlike stocks, represent voting ownership