Stock prices move opposite to the changes in the dividends stockholders expect to be paid in the future, but they move in the same direction as changes in rates of return.
Answer the following statement true (T) or false (F)
False
If investors demand higher (lower) returns to invest in stocks, then prices should fall (increase). If investors expect their investments to generate lower (higher) future cash flows, then prices should fall (increase). See 7-4: Changes in Stock Prices
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