The value of a stock is determined by computing the _____ of all of the _____ the stock is expected to generate in the future.

a. present value; dividends

b. future value; dividends

c. present value; capital gains

d. future value; market prices

Which of the following best describes American depository receipts (ADRs)?

a. A provision that gives existing common stockholders the right to purchase new issues of common stock on a pro rata basis before any shares can be offered to other investors

b. A document giving one person the authority to act for another, it typically gives them the power to vote shares of common stock

c. A stock, owned by the firm's founders, which has sole voting rights but generally pays out only restricted dividends for a specified number of years

d. Certificates created by organizations such as banks; they represent ownership in stocks of foreign companies that are held in trust by banks located in the countries where the stocks are traded