Stocks Beginner: Types of Stock

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1.
Why do growth stocks pay little by way of dividends?
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The issuing company reinvests profits to finance future growth. This is a common practice among rapidly growing companies.
2.
The stock of which of the following companies probably does not qualify as income stock?
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An Internet company. Internet companies are too new for their stocks to qualify as income stock.
3.
Which of the following stocks is so called because it has been repurchased by the issuing company?
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Treasury. The company returns this stock to its treasury.
4.
A new company that habitually reinvests its dividends qualifies as a blue chip company.
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False. Blue chip companies are both established and able to pay dividends consistently.
5.
A value stock is a stock that ________.
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Is currently valued for less than it is really worth. In the case of value stocks, market prices do not reflect the earnings and growth potential of the issuing company.