Question

1. Which of the following is NOT true about a common stock? A. A common stock is a security that is a claim on the earnings and assets of a company B. A common stock is the principal way that corporations raise equity capital C. Holders of common stock own an interest in the corporation consistent with the percentage of outstanding shares owned D. Holders of common stock do not have any rights 2. Which of the following is a key assumption characterizing rational expectations? A. People do not make use of past observations because these observations are out-of-date. B. People do not make sudden changes in their expectations. C. People are able to forecast future events without error. D. People make optimal use of their information when forming their expectations. 3. According to the one period valuation model, the current price of a stock share equals A. the average expected dividend payment per period plus a constant. D. the value of next period's expected dividend payment plus next period's expected share sale price discounted by the required return on investments in equity. B.the average expected dividend payment plus capital gains (or losses) per period. C. the value of next period's expected dividend payment will always be zero. 4. That expectations are formed from past experience(s) as some kind of weighted average of past observations is known as: A. optimal statistical forecasting B. rational expectations C. perfect foresight expectations D. adaptive expectations 5. The Gordon Growth Model is derived from the generalized dividend valuation model. Which of the following is the fundamental assumption underlying this model? B. The required return on equity investment ke increases at a constant rate. D. Dividends are constant over time. C. Dividends are expected to grow at a constant rate g. A. The expected dividend growth rate g increases.
this is money and banking questions.

Answer 1

Q 1)

Answer:-

The rights that the common shareholders of a company includes right on company's profits, income, and assets and a certain degree of control and influence over company management selection along with the preemptive rights on newly issued shares and voting rights in the board members selection along with some rights in case of mergers.

All the options A, B and C are all correct and option D is incorrect.

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