the economics of money, banking, and financial markets

183 $

© 2014 Pearson Canada Inc.$

5. 
   

   Common stock is the principal way that corporations raise ____.
   A) short-term debt
   B) foreign exchange
   C) long-term debt
   D) equity capital
   Answer: D
   Diff: 1 Type: MC Page Ref: 138
   Skill: Recall
   Objective List: 7.1 Illustrate how stocks are valued as the present value of dividends

   
   


6. 
   

   Dividends are paid from ____.
   A) liabilities
   B) debts
   C) net earnings
   D) interest
   Answer: C
   Diff: 1 Type: MC Page Ref: 138
   Skill: Recall
   Objective List: 7.1 Illustrate how stocks are valued as the present value of dividends

   
   


7. 
   

   Periodic payments of net earnings to shareholders are known as ____.
   A) capital gains
   B) dividends
   C) profits
   D) interest
   Answer: B
   Diff: 1 Type: MC Page Ref: 138
   Skill: Recall
   Objective List: 7.1 Illustrate how stocks are valued as the present value of dividends

   
   


8. 
   

   The value of any investment is found by computing the ____.
   A) present value of all future sales
   B) present value of all future liabilities
   C) future value of all future expenses
   D) present value of all future cash flows
   Answer: D
   Diff: 1 Type: MC Page Ref: 138
   Skill: Recall
   Objective List: 7.1 Illustrate how stocks are valued as the present value of dividends