In the constant-growth dividend valuation model, the required rate of return on common stock (i.e., cost of equity capital) can be shown to be equal to the sum of the dividend yield plus the ____
a. yield-to-maturity
b. present value yield
c. risk-free rate
d. dividend growth rate
e. none of the above
d
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Which of the following best describes the reason why the division of labor allows individuals and firms to specialize and produce more?
a. It reduces the need for more workers. b. It limits the need for economies of scale. c. It allows individuals and firms to focus on areas of disadvantage due to natural factors and skill levels. d. It allows individuals and firms to take advantage of economies of scale.
One of the concepts that is illustrated by a downward sloping production possibilities frontier is that
a. technology must change in order to produce more of a particular good b. to produce more of one good, some of the alternative goods must be given up c. opportunity cost generally declines as more of a good is produced d. specialization leads to gains in overall utility for society e. opportunity cost generally does not vary as more of a good is produced
Figure (a) represents the domestic demand and supply of televisions. However, if free trade is allowed and the current world price of televisions is P1 as shown in Figure (b) then the quantity of televisions imported would be
a. Q3 minus Q1.
b. Q4 minus Q1.
c. Q2 minus Q1.
d. Q4 minus Q3.
Some economists argue that monopolistically competitive markets are inefficient because:
A. the firms earn economic profits in the long run. B. the firms' marginal costs and marginal revenues are not always equal. C. firms do not produce the output rate that would minimize their average total cost. D. barriers to entry are high.