A Stock Issued by a Company That Has a Capitalization

question 42

Multiple Choice

A stock issued by a company that has a capitalization of $300 million or less is called a _______ stock.

• A) blue chip
• B) income
• C) micro cap
• D) midcap
• E) penny

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Definitions:

Retained Earnings

The portion of net income that is retained by a company rather than distributed to its shareholders as dividends, often used for reinvestment.

Market-to-Book Value

A ratio used to compare a company's current market price to its book value, indicating how highly the market values the company relative to its actual assets.

Financial Statements

A set of formal records that outline an entity's financial activities and condition, including the balance sheet, income statement, and cash flow statement.

Stock Market

A collection of markets and exchanges where the buying, selling, and issuance of shares of publicly-held companies occur.