Question
Please the correct option. and answer quick please Q1: In which of the following situations 1 and 2 the transaction is on primary/seconadary market: 1.
Please the correct option. and answer quick please
Q1:
In which of the following situations 1 and 2 the transaction is on primary/seconadary market:
1. An investor buys existing shares of Apple stock in the open market. Is this a primary or secondary market transaction?
2. Costa Cafe decides to issue additional stock with the assistance of an underwritter. An investor purchases some of the newly issued shares. Is this a primary market transaction or a secondary market transaction?
A. situation 1 is a transaction in the primary market, while situation 2 is a transaction in the secondary market.
B. In both situations, transactions are in the secondary market.
C. Since new shares of stock are being issued in situation 2, this is a secondary market transaction, while situation 1 is in the primary market.
D. Transaction in situation 1 is in the secondary market, while the transaction of situation 2 is in the primary market.
E. In both situations, transactions are in the primary market.
__
Q2:
If a profitable firm decreases its dividend payment to shareholders, then investors understand that ...
A. The firm generated lower earnings
B. Dividends are irrelevant to the firms value
C. The firm would be suitable for retail investors and not for institutional investors
D. The firm has many profitable investment projects and needs to have increased retained earnings
E. The firm has many investment projects and needs to have increased retained earnings
___
Q3:
Calculate the price of a 1-year bond paying coupon rate 10% semi-annually with a YTM 8% and face value $1,000.
$946.50
$94.65
$94.30
$1018.86
$945.60
A. $101.88
B. $94.30
C. $94.65
D. $945.60
E. $1018.86
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started