Use the Following Two Columns of Items to Answer the Matching

question 96

Short Answer

Use the following two columns of items to answer the matching questions below:
-IPO
A)first offering of a firm's stock to the public
B)facilities that allow investors to purchase or sell existing stocks
C)investors owning this type of stock have priority over common stockholders in receiving dividends
D)market where existing securities are sold
E)individual investors who buy and sell stocks within a day
F)financial instruments that represent partial ownership of a firm
G)debt instruments issued by the government or corporations to borrow money from investors
H)professionals responsible for clients' funds

• A)first offering of a firm's stock to the public
• B)facilities that allow investors to purchase or sell existing stocks
• C)investors owning this type of stock have priority over common stockholders in receiving dividends
• D)market where existing securities are sold
• E)individual investors who buy and sell stocks within a day
• F)financial instruments that represent partial ownership of a firm
• G)debt instruments issued by the government or corporations to borrow money from investors
• H)professionals responsible for clients' funds

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Definitions:

MM Model

The MM Model, or Modigliani-Miller Theorem, is a finance theory that suggests market value of a company is determined by its earning power and risk of underlying assets, independent of its capital structure.

Cost Of Equity

The return a company requires to decide if an investment meets capital return requirements, often used in capital budgeting to evaluate projects.

Capital Structure

The composition of a company's liabilities and equity, describing how it finances its overall operations and growth.

Earnings Per Share

A financial ratio that divides a company's net earnings available to common shareholders by the number of outstanding shares, indicating the profitability on a per-share basis.