Question:Question 1

Elections of directors of a corporation are usually held every 5 years.

True

False

Question 2

A firm's common stockholders have the right to elect its directors, who in turn elect the officers who manage the business.

True

False

Question 3

A document giving one person the authority to act for another, typically the power to vote shares of common stock, is known as proxy.

True

False

Question 4

A proxy fight is an attempt by a person or a group to gain control of a firm by getting its stockholders to grant that person or group the authority to vote its shares to replace the current management.

True

False

Question 5

Preemptive rights give the bond holders the right to purchase on a pro rata basis new issues of bonds.

True

False

Question 6

Value of a share of common stock depends on the cash flow it is expected to provide from dividends and interest payments.

True

False

Question 7

A representative investor whose actions reflect the beliefs of people who are trading a stock is known as a marginal investor.

True

False

Question 8

A merger occurs when a person or group succeeds in ousting a firm's management and taking control of a company.

True

False

Question 9

An estimate of a stock's "true" value is also known as its intrinsic value.

True

False

Question 10

When the intrinsic value of a stock is equal to the market price, there is said to be a market equilibrium.

True

False