Is an initial public offering an example of a primary or a secondary market transaction? Explain.

Answer the following question.

Is an initial public offering an example of a primary or a secondary market transaction? Explain.

What are some actions that stockholders can take to ensure that management’s and stockholders’ interests are aligned?

Is an initial public offering an example of a primary or a secondary market transaction?

Briefly explain what is meant by the term efficiency continuum

Indicate whether the following instruments are examples of money market or capital market securities.

a. U.S. Treasury bills

b. Long-term corporate bonds

c. Common stocks

d. Preferred stocks

e. Dealer commercial paper

Which of the following statements is incorrect? a. The normal balance of the receivable account is a debit. b. The normal balance of the owner’s personal account is a debit. c. The normal balance of an unearned revenues account is a credit. d. The normal balance of an expense account is a credit. e. All of the above statements are correct.

Which one of the following is a primary market transaction?

A. sale of currently outstanding stock by a dealer to an individual investor
B. sale of a new share of stock to an individual investor
C. stock ownership transfer from one shareholder to another
D. shareholder gift of stock from one shareholder to another shareholder
E. gift of stock by a shareholder to a family member

Edmund Enterprises recently made a large investment to upgrade its technology. Although these improvements won’t have much effect on performance in the short run, they are expected to reduce future costs significantly. What effect will this investment have on Edmund Enterprises’ earnings per share this year? What effect might this investment have on the company’s intrinsic value and stock price?

Why can firms not just use their own profits for financial capital, with no need for outside investors?

Should stockholder wealth maximization be thought of as a long-term or a short-term goal? For example, if one action increases a firm’s stock price from a current level of $20 to$25 in 6 months and then to $30 in 5 years, but another action keeps the stock at$20 for several years but then increases it to $40 in 5 years, which action would be better? Think of some specific corporate actions that have these general tendencies.

What does it mean when we say the New York Stock Exchange is an auction market? How are auction markets different from dealer markets? What kind of market is NASDAQ?

What is a firm’s intrinsic value? Its current stock price? Is the stock’s “true” long-run value ‘more closely related to its intrinsic value or to its current price?

Which of the following is NOT a money market instrument?

-Commercial paper

-Treasury bills

-Corporate bonds

-Bankers' acceptances