A stock's internal rate of return (IRR) is the discount rate that cause the present value of future dividends and the price at which a stock is expected to be sold to equal the current price of the stock. O True O False

Q: The wider the dispersion of returns on a stock, the:

A: Investors evaluate the portfolio or security on the basis of risk profile. The risk profile can be…

Q: A stock's capital gains are equal to its dividend divided by the stock price. OA. True OB. False

A: The required rate of return on a stock measures the rate of return desired by the investors in the…

Q: he price to earnings ratio (P/E) is determined by:   Question 6 options:   1)  expected dividend…

A: P/E ratio stands for Price-Earning ratio. It is that accounting ratio which tells that how much an…

Q: A class of Efficient Market Hypothesis that implies all public information is calculated into a…

A: Efficient Market Hypothesis is the market theory which depicts that market is generally efficient…

Q: Define the terms covariance and correlationcoefficient. How are they related to one another,and how…

A: Covariance refers to the situation which tells about the association between two variables how they…

Q: There is a --- impact of earnings on stock prices O a. Deductive O b. Positive O c. Normative O d.…

A: Earnings, also known as net income or profit, represent the amount of money a company has left over…

Q: How does higher expected growth affect a stock’s value?

A: Stock value is referred to as the shares of the corporation, which used to appear to trade at the…

Q: The expected return on a stock is called the __ from the investor's perspective, and the __ from the…

A: The expected return for the stock is an important concept. To calculate the expected return for the…

Q: How would you use the dividend yield model to value the price of a stock if it presently does not…

A: Answer: Dividend discount model is used to valuate a stock that is expected to pay future dividends.…

Q: When treasury stock is purchased for more par value of the stock and the cost method is used to…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: How can I calculate CF or (dividends + buyback) in Implied equity risk premium? (By example of…

A: Implied ERP is calculated by first calculating the Return on Equity using constant dividend growth…

Q: Should an increase in the volatility of a firm's stock returns be associated with an increase in the…

A: A Call Option is the option(right but not obligation) to purchase an underlying security at…

Q: he price of a stock is:

A: The price of a stock is the present value of all expected future dividends, discounted at the…

Q: The required return on Miller Corporation stock is

A: The beta of a stock is the degree of responsiveness to movements in price with changes in the stock…

Q: When calculating a fair value for a stock you are considering buying you should consider all the…

A: The correct answer to the question is "How long you expect to keep it".The duration of the…

Q: A stock with a dividend of $0 must have a value that is less than a stock with a dividend of $2.…

A: The dividends refer to the bonus return that the company provides to its shareholders. It is used as…

Q: A stock's required rate of return The part of a stock's risk that can be eliminated is know as…

A: The risk that can be eliminated is called Unsystematic risk.This risk can be eliminated by the…

Q: What is a capital gain? O The total amount of return expected from a stock investment. O The present…

A: A capital gain is the profit that an investor realizes when they sell an asset, such as a stock, for…

Q: short seller anticipates the stock price will __________, so that the share can be purchased later…

A: In case of short selling, shares are short sold with the anticipation of share price falling and…

Q: Analysis Questions of Stock Valuation The "stock valuation model" referred to in the questions below…

A: Dividend: It is that portion of the company’s profit that is distributed between the shareholders…

Q: What are the main stock- and firm valuation methods and is there a relationship between the stock…

A: Value of the firm is the market value of the firm at its present market value of eah share.

Q: In the simple Keynesian model of income determination, investment is O the buying and selling of…

A: in the Keynesian determination of national income there is mainly to methods which include saving…

Q: Indicate factors influencing the market price of a stock. Explain how changes in the factors will…

A: There can be many factors affecting the stock price, for example, the growth rate, the required…

Q: Select all that are true with respect to a Price/Earnings (P/E) ratio. Group of answer choices Low…

A: Price/Earnings (P/E) ratio-This ratio helps to  compare the price of a company's stock to the…

Q: Which of the statements is NOT TRUE about the yield of a stock? a) It is comprised of dividend yield…

A: Capital Gain/Loss: It refers to the change in the value of an investment made by an individual or an…

Q: If the market value and the intrinsic value of a stock differ; O a. the stock sells for its fair…

A: Intrinsic value is the actual value of the stock which is best on the fundamental factor that can be…

Q: Earnings per share is a factor used by the stock market to determine stock prices. Select one: True…

A: There are many methods to determine the stock price of a share. Earnings per shares gives the dollar…

Q: what are two methods to calculate the expected rate of return for stocks?

A: The required rate of return (RRR) is the lowest rate of return an investor will accept for holding…

Q: Which one of the following is an example of mental accounting? Multiple Choice associating a…

A: The term "mental accounting" describes the various valuations that individuals assign to the same…

Q: A stock's next expected dividend divided by the current stock price is the: O current yield O total…

A: A stock's price is decided by the dividend it pays, the dividend growth rate and the required rate…

Q: how do the upward trend and downward trend of share price(stock price changes) relates to the market…

A: Market Efficiency - A market is efficient when such  market is characterized by perfect and…

Q: ________ is a model for determining the price of a stock, based on a future series of dividends that…

A: The price of a stock can be determined by the present value of dividends paid in the future.

Q: Which of the following statements regarding the dividend discount model f computing stock prices…

A: According to the Gordon’s Model, the market value of the share is equal to the present value of…

Q: Assume the price, S, of a non-dividend paying stock follows geometric Brownian motion with drift r…

A: A call option gives the right to the buyer to buy a stock at an exercise price X. An option is a…

Q: Explain how to find the value of a nonconstant growth stock

A: Introduction: Non-constant models of growth presume that the valuation can fluctuate over time. This…

Q: Explain realized rate of return on stock

A: Realized Rate of Return on stock gives you the percentage return on holding the stock for a certain…

Q: alue of a stock is less than the current market price, I should ________________ the stock since it…

A: In the stock market prices of stocks are changing and are not fixed and sometimes go up and…

Q: Which of the following best describe a speculative stock? high risk, low volatility, start-ups high…

A: Speculative stocks are those where the price of stock changes too frequently and are quite volatile.

Q: In a ________ index, changes in the value of the stock with the greatest market value will have the…

A: The value weighted index is a type of index which is considering the effect of weight of a…

Q: Which of the following statements is most correct? Other things equal, the higher the dividend…

A: Each of these statements reflects different financial concepts that can influence stock values, but…

Interest Rate

When you deposit your money with the bank, the deposit earns you some extra money at the end of the specific period – something more than what you deposited. That amount of money that the bank pays you for keeping the money with the bank is the “interest” and the percentage at which the bank pays you for your amount is called the “interest rate”.