[Topsya]

The market value of a firm’s outstanding common shares will be higher, everything else equal, if

Answers

A: Investors have a lower required return on equity.

B: Investors expect lower dividend growth.

C: Investors have longer expected holding periods.

D: Investors have shorter expected holding periods

THe correct asnwer is A. How so? THanks

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[jennknee]

If the ROE is higher with this stock, and most investors expect fewer returns, they are willing to pay more for this stock.

I feel like it's how people pay a premium on a bond when the stated interest rate is higher than the market rate of interest.

AUD - 7/5/13 - 93
FAR - 8/24/13 - 91
BEC - 11/30/13 - 92
REG - 2/24/14 - 91! DONE!

CPAreviewforFREE, Wiley Test Bank, Becker, and NINJA FLASHCARDS. <3
Candidate from California

[jennknee]

If the ROE is higher with this stock, and most investors expect fewer returns, they are willing to pay more for this stock.

I feel like it's how people pay a premium on a bond when the stated interest rate is higher than the market rate of interest.

AUD - 7/5/13 - 93
FAR - 8/24/13 - 91
BEC - 11/30/13 - 92
REG - 2/24/14 - 91! DONE!

CPAreviewforFREE, Wiley Test Bank, Becker, and NINJA FLASHCARDS. <3
Candidate from California

[Topsya]

OOOhhhhhh i got it! Thanks @jennknee!!!

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Topsya]

OOOhhhhhh i got it! Thanks @jennknee!!!

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Author]

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