2) Preferred stock can be valued using the:

a)free cash flow valuation model.

b)zero-growth value model.

c)constant-growth model.

d)variable growth model

3) When a company wishes to raise capital through the sale of common stock but does not want to give up control it issues:

1. treasury stock.
2. nonvoting stock.
3. rights.
4. supervoting stock

4) Most firms have several classes of common stock outstanding.

a) True

b)False

5)An example of a primary market transaction is buying 100 shares of Wal-Mart stock from your uncle.

a) True

b) False