Question # 2: Which of the following statements is CORRECT? a. If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction. b. If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction. c. The IPO market is an example of a primary market. d. None of the above.

Question # 2: Which of the following statements is CORRECT? a. If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction. b. If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction. c. The IPO market is an example of a primary market. d. None of the above.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 13PB: You are a consultant working with various companies that are considering incorporating and listing...

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You are a consultant working with various companies that are considering incorporating and listing shares on a stock exchange. One of your clients asks you about the various acronyms she has been hearing in conjunction with financial analysis. Explain the following acronyms and how they measure different things but may complement each other: EPS (earnings per share), EBITDA (earnings before interest, taxes, depreciation, and amortization), and NOPAT (net operating profit after taxes).
Assume you purchased ten shares of Roku during the companys IPO. Comment on why this might be a good investment. Consider factors such as what you expect to get from your investment, why you think Roku would become a publicly traded company, and what you think is the landscape of the industry Roku is in. What other factors might be relevant to your decision to invest in Roku?
Question # 2: Which of the following statements is CORRECT? a. If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction. b. If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction. c. The IPO market is an example of a primary market. d. Question # 3: Which of the following statements is CORRECT? a. Capital market instruments include both long-term debt and common stocks. b. An example of a primary market transaction would be your uncle transferring 100 shares of Wal-Mart stock to you as a birthday gift. c. The NYSE does not exist as a physical location; rather, it represents a loose collection of dealers who trade stocks electronically. d. If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a primary market transaction.…
You owned 300 shares of Microsoft stock. But you just sold 100 shares this morning. Which one of the following statements best describes the stock sale transaction? Group of answer choices a. This is an example of a secondary market transaction. b. This is an example of primary market transaction. c. This is an example of an exchange of physical assets. d. This is an example of money-market transaction.
If an investor were to sell 100 shares of Microsoft stock to another investor in the SECURITIES MARKET, this would be referred to as what type of transaction? - a future market transaction - a secondary market transaction -it is primary market transaction - a money mar
Answer Number 1 and 2: 1. Apple Computer decides to issue additional stock with the assistance of its investment banker. An investor purchases some of the newly issued shares. Is this a primary market transaction or a secondary market transaction? 2. What if instead an investor buys existing shares of Apple stock in the open market. Is this a primary or secondary market transaction?
Which of the following is a primary market transaction? You sell 200 shares of Johnson & Johnson stock on the NYSE through your broker. Johnson & Johnson issues 2,000,000 shares of new stock and sells them to the public through an investment banker. You buy 200 shares of Johnson & Johnson stock from your younger brother. You just give him cash and he gives you the stock¾the trade is not made through a broker. One financial institution buys 200,000 shares of Johnson & Johnson stock from another institution. An investment banker arranges the transaction. You invest $10,000 in a mutual fund, which then uses the money to buy $10,000 of Johnson & Johnson shares on the NYSE.
Indicate whether the following statements are true or false. If the statement is false, explainwhy.a. If a firm repurchases its stock in the open market, the shareholders who tender thestock are subject to capital gains taxes.b. If you own 100 shares in a company’s stock and the company’s stock splits two-forone,you will own 200 shares in the company following the split.c. Some dividend reinvestment plans increase the amount of equity capital available tothe firm.d. The Tax Code encourages companies to pay a large percentage of their net income inthe form of dividends.e. If your company has established a clientele of investors who prefer large dividends,the company is unlikely to adopt a residual dividend policy.f. If a firm follows a residual dividend policy, holding all else constant, its dividendpayout will tend to rise whenever the firm’s investment opportunities improve.
Which of the following is not a typical question that must be answered with regard to a private company that is owned by a large number of shareholders? Question 46 options: How and when does the company get money from the sale of its stock? What rate of return does the company promise to pay when it sells stock? What is the dividend yield on preferred shares of companies that hold this stock? Who makes decisions in a company owned by a large number of shareholders?
10. If an investor were to sell 100 shares of MicroSoft stock to another investor in the securities market, this would be referred to as what type of transaction? a. A primary market transaction. b. A secondary market transaction c. A money market transaction. d. A futures market transaction. e. None of the above.
Q3 Which of the following statements is CORRECT? a. Capital market instruments include both long-term debt and common stocks. b. An example of a primary market transaction would be your uncle transferring 100 shares of Wal-Mart stock to you as a birthday gift. c. The NYSE does not exist as a physical location; rather, it represents a loose collection of dealers who trade stocks electronically. d. If your uncle in New York sold 100 shares of Microsoft through his broker to an investor in Los Angeles, this would be a primary market transaction. e. While the two frequently perform similar functions, investment banks generally specialize in lending money, whereas commercial banks generally help companies raise large blocks of capital from investors.
1) What is Common Stock,2) This is an example from what I read in my textbook. It stated that the owners purchased 20,000 shares of Common Stock. a) If they are already owners of the company why would they buy common stock b) Since they are the owners who are they buying the common stock from?3) Please explain Par Value and please give an example

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a.	If Apple issues additional shares of common stock through an investment banker, this would be a secondary market transaction.
b.	If you purchased 100 shares of Apple stock from your sister-in-law, this would be an example of a primary market transaction.
c.	The IPO market is an example of a primary market.
d.	None of the above.