2. Shareholders gains come in the form of: (Points : 1) only dividends. only cap

Question

2. Shareholders gains come in the form of: (Points : 1)      

only dividends.
       only capital gains.
       dividends and capital gains.
       interest payments

6. The great majority of stock trades occur: (Points : 1)        in the secondary markets.
       in the primary market.
       as IPOs (initial public offerings).
       directly between the company and investors.

9. The cash flows for a perpetuity continue into the future indefinitely. An example of a perpetuity is: (Points : 1)        preferred stock.
       corporate bonds.
       a home mortgage.
       a consumer loan.

Explanation / Answer

Solution :

2) Shareholder are the owners of company and their ownership is restriced to number of shares owned by particular shareholder. Whenever the company earns profit, Company distribute a part of its profit to the share holder as a remuneration which is termed as "Dividend". Also The Share holder can earn profit from sale of their shares which is termed as "Capital Gains".

6) Whenever Company wants to raise the capital It can raise it by issuing shares in primary market. This shares are then Traded frequently in the Secondary Market.

9) The cash flow for perpetuity can be continued in the future by purchasing "Corporate Bonds" by way of coupon payment on such bonds.

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