Assume that the risk-free rate remains constant, but the market risk premium declines. Which of the following is most likely to occur?
A. The required return on a stock with beta > 1.0 will increase.
B. The return on "the market" will remain constant.
C. The return on "the market" will increase.
D. The required return on a stock with beta < 1.0 will decline.
E. The required return on a stock with beta = 1.0 will not change.
Answer: D
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Stock appreciation rights can have a material impact on reported earnings
Indicate whether the statement is true or false
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Lakeside Nursing Home has two operating departments, Custodial Care and Rehabilitation. It also has a Housekeeping Department that serves the two operating departments. The costs of the Housekeeping Department are all variable and are charged to the operating departments on the basis of labor-hours. Data for September follow: Custodial CareRehabilitationBudgeted labor-hours 3,000 1,000 Actual labor-hours 3,200 1,600 ?The budgeted costs of the Housekeeping Department for September were $24,000 and the actual costs were $29,760.?For performance evaluation purposes, how much of the actual Housekeeping Department costs for September should not be charged to the operating departments?
A. $1,240 B. $0 C. $5,760 D. $960